Is There Such Thing As Too Many Payment Choices Offered by Retailers?

Online payment methods play a critical role in a customer journey, so the efforts to diversify their selection at checkout have earned one of the top spots on every merchant’s list of priorities. As a result, many business owners try to offer as many payment options as possible. Yet, as new payment methods continue emerging, the amount of choices can become overwhelming for consumers.

This article provides insight into the best checkout practices and explains how merchants can strike a balance between a wide array of payment options and a smooth shopping experience.

Why Do Retailers Need to Be Selective With Payment Options?

As practice shows, it’s best to limit the number of payment options available at checkout, as presenting shoppers with too many choices can:

• Cause confusion. On average, 8% of customers abandon their shopping carts due to a lack of payment methods available. However, a complicated checkout process results in 28% of purchases that were not completed¹. A page with too many payment options can make consumers feel overwhelmed and confused and prevent them from finalizing the transaction.
• Result in big expenses. From the merchants’ perspective, integrating numerous payment options and keeping them in check may require a lot of time and financial investments and end up failing to deliver the desired returns.
• Decrease consumer trust. Some users are more open to new payment methods than others. Thus, when certain groups of consumers see payment options that they aren’t familiar with or don’t trust enough, it could undermine their attitude toward the eCommerce platform they are shopping on.

Thus, every retailer needs to determine the ideal combination of payment methods to ensure the checkout process is straightforward and appealing to their target audience. But how does one make an informed decision on which options to include in the final line-up?

How to Pick the Right Payment Methods for Your Audience

Here are three key steps retailers can take to ensure the payment options they offer will provide the best return on investment (ROI) while keeping the customers happy:

1. Getting to Know the Target Audience

Such insights can be gained by referring to the established buyer personas as well as data based on previous orders and customer engagements.

2. Understanding the Options

Once a retailer has a clear understanding of their audience, they can connect the dots by understanding the array of payment options available to choose from.

Some of the most popular payment options used by online merchants nowadays are:

• Digital wallets, such as Google Pay, Apple Pay, and PayPal
• Credit and debit cards, like Visa, Mastercard, American Express, and local options
• Buy Now, Pay Later services, such as Klarna, Affirm, and Afterpay
• Cryptocurrency

It’s crucial for retailers to have a clear idea about how various payment options work and in which ways they differ to be able to match them to their customers’ preferences correctly.

3. Monitoring the Performance

After the payment methods are selected, it’s essential to closely monitor eCommerce metrics and take note of which ones are performing best. The options that are hardly ever used and are unnecessarily cluttering the space on the checkout page can be replaced with more effective options.

Summing Up: How Many Payment Options Should Merchants Offer?

All in all, blindly adding various payment methods for the sake of diversifying the choices at checkout isn’t a winning strategy for online sales. Instead, merchants should aim to determine approximately four or five options that are most likely to resonate with their target audiences while attracting other potential shoppers.

While keeping the checkout process simple yet convenient to a wide array of clients requires research and careful analytics during the initial steps, this hard work definitely pays off both in the short and long term.

¹ - Nexcess - Multiple Payment Gateways: Are There Advantages For Your Ecommerce Business?