Nov 19, 20184 min read

How optimizing your payment mix can increase your conversion rate.

by Klarna.com

When operating an online store, selling goods and services, card payment is often thought of as the primary payment method that you need to offer your customers, as global usage is widespread and most people have some type of card in their wallet. However, consumers live busy lifestyles, and innovations within technology and payments have presented alternative payment methods like digital wallets and mobile payments, raising consumer expectations of online vendors, expecting you to keep up with their demand for convenience and a good customer experience, irrespective of what device they shop from. Thus, as expectations grow, you need to adapt the payment mix you offer in your checkout, in order to maintain or develop a high conversion rate, while at the same time, keeping the checkout and payment process friction-free.

Offering more than a card payment option

For some time the assumption has been that, as a merchant selling online, all you need is a payment solution that accepts card payments. The reason for this is probably because card usage worldwide is widespread in commerce, and it’s most likely that people and households will have a card of some sorts, either a debit- or a credit card. However, as the payment industry develops, and new solutions are presented, card payment becomes a non-flexible payment method, providing little of what customers and online shoppers actually need. Because what consumers want today are payment options that are convenient and don’t require much effort when shopping online. With mobile usage changing how consumers shop and pay, and mobile users are estimated to have reached 2 billion; cards are increasingly becoming a hassle to manage while shopping on the go. Having to manoeuvre the mobile with one hand, while finding one’s a card in the purse, bag, wallet or pocket with the other, is in itself tricky, and might drive people away from their purchase if there aren’t  other payment solutions not requiring the same amount of effort. Then add in the fact that when on the go, people are often in a public space, meaning that they’re less inclined to type in sensitive card details, not knowing who is sitting next to them on the bus, the tube or in the café. In essence, if card payment is the only payment method you offer, think again.

Introducing alternative payment methods

In the past decade or two, we’ve seen the development of alternative payment methods (APMs), such as invoice, digital wallets and digital currencies, that try to cater to shopper needs of convenience and a smoother buying processes. While card payment is still a dominant payment method globally, APM adoption is on the rise. Research shows that alternative payment methods have grown approximately 35 percent in the past years and are expected to surpass card payments as the main payment method within e-commerce in 2017.

While there are various sector-, country, and organisation specific debates regarding what constitutes as an alternative payment method, alternative payment options are often referred to as “non-card payment methods”, meaning everything but credit- or debit card payments.

The payment experience equals the customer experience

Consumer needs and preferences change at a rapid pace, and as advancements are made in the payment industry, consumer needs and wants follow suit, favoring online vendors who offer new and more convenient methods above those who don’t. The notion of convenience and user experience is a change in perception and mindset for both businesses and consumers. Instead of the payment merely being a transaction, payment is now seen as a service, and part of the overall shopping experience online. Those online vendors that adapt to this new view, will win customers as well as a reputation for being forward-thinking and caring.

While it can be tricky to manoeuvre the landscape of alternative payments and know which options to offer, offering alternative payment methods means that you can change the way consumers shop, by truly cater to their actual needs. Giving your customers new, no-risk payment options at the checkout, you can remove many of the barriers that result in abandoned purchases, thereby significantly improving your conversion rate and the user experience of your online store. For example, by offering the option to defer payment for two weeks, you would demonstrate that you think about the practicalities of online shopping, and that you’re trying to arrange so that shoppers easily can order, but not have to pay upfront for a product that might not be satisfactory or wanted, or a product that might get lost because of human error with the delivery company. Another example would be offering the option of paying in instalments, again demonstrating that by offering part-pay options, you show that you have understood the burden that a one-off payment can represent, and that you’ve taken action to relieve that burden.


Optimizing how people pay is a surefire way to significantly boost sales, and substantially grow profit margins.