Whether physical or electronic, commerce is always faced with the need to judiciously place the cursor between security, shopping experience and ROI. A complex equation that often crystallizes around the choice of payment solutions. Explanations.
If we refer to the key figures from Fevad, the e-commerce sector – products and services combined – will total 159.9 billion euros in turnover in 2023. A figure up 10.5% compared to the previous year. The sector accounted for 2.35 billion transactions last year, compared to 2.24 billion in 2022. Good performances which should not hide a reality: the ever-increasing competition between online sales players… and retailers whose activities continue to converge.
For Antoine de la Rivière, vice-president of sales for Alma, “The fundamental challenge for merchants today is that of timid growth. E-commerce and retail players are looking for new growth levers. This involves optimizing the average basket, conversion and then loyalty.”. An observation shared by Grégoire Bourdin, founder of Bazalt, ex-founder of Treezor: “Retail players are clearly under attack today. Competition from marketplaces, rising acquisition costs… So many difficulties that lead us to think about optimizing the transformation.”
In this context, the smallest detail counts and payment is becoming, more than ever, a strategic axis of the purchasing experience. According to the Odoxa study carried out on behalf of Fevad in January 2024, 84% of purchases made online in the last 12 months were paid for by credit card and 37% through various electronic payment solutions. Transfers or direct debits do not exceed 27% of purchases. While inflation is not really loosening its grip on French consumers, e-commerce and retail players must do everything they can to offer attractive prices and seamless purchasing and payment experiences. Two challenges that split payment effectively addresses…
The wave of Buy Now Pay Later (BNPL)
Offering split payment is no longer a topic today. The practice has become established in France, and in Europe, as a consumer practice in its own right because seven out of 10 French consumers have already used payment facilities in the last 12 months. This is what the third edition of the FLOA – Kantar barometer on changes in payment practices in Europe reveals. “BNPL is a solution for tight budgets in periods of inflation, but what our studies reveal is that it is especially gaining ground among more tech-savvy, younger populations, sometimes on CSPs. Split payment is now a universal solution.”observes Marc Lanvin, deputy general manager of Floa. Fraud is a major threat to retailers and consumers alike. “BNPL is four times more threatened than traditional payment”says Marc Lanvin, who points out that Floa is investing massively in technological innovation to ensure payment security. “We have been scoring as much data as possible for many years and we rely on AI which validates our strategic model.” Data scientists work daily to understand and decipher emerging fraud networks. “We use tools that allow us to model trends and fraud patterns. These weak signals put us in a dynamic of anticipation.”
Fraud control vs conversion?
In the complex discipline of payment, conversion is a central topic. But If we look at the entire check-out process, conversion is not limited to the act of payment. The upstream phases, which are the responsibility of the merchant (construction and dramatization of the offer, pricing strategy, acquisition management), all these variables require perfect management. “However, it is clear that the big names in payment today limit their action to the final act of the transaction without really taking an interest in the entire funnel,” notes Grégoire Bourdin, who considers that the multiplication of payment methods cannot be the only response to the challenges facing retailers. “If we don’t take into account the entire conversion funnel, it is not possible to provide a granular and efficient response to the entire process.”
Choice of payment methods, consumer identification, fight against fraud, merchants know that payment is a key moment in the purchasing process. This is why Antoine de la Rivière advocates for the integration of payment very early in the funnel:“Right from the pre-sale stages, you need to communicate about the payment methods offered because this choice can condition the consumer’s behavior in relation to their search. If they discover very early in the process that they can split the payment, they can consider moving towards different products.” This is the approach taken by the Maisons du Monde brand, which offers split payment via Alma. In this network, information on in-store payment methods has been completely scripted. How? “We support merchants by sharing POS displays with them to deploy at points of sale to communicate on payment methods and in particular on payment schedules, including with a display on price labels”says Antoine de la Rivière. He states with conviction: “Marketing, retail, e-commerce and customer experience directors must address this issue of payments because it is a major differentiator in a context of sluggish growth.”
A need for clarity and rationalization
Removing friction and barriers to purchasing is an even more critical issue when the amount of the basket soars. Between payment solutions in several installments, often expensive, a free Paypal payment in several installments, but limited to 2,000 euros, a cash payment with multiple authentication phases, the complexity is real. For Grégoire Bourdin, payment providers should probably get more involved in the reality of the experiences offered to consumers. He explains: “In my opinion, the action of payment providers is too self-centered. Check-outs are very complex processes and, when a payment is declined, it is often difficult to know what caused this failure because the bank or the merchant’s partner does not have the issuer’s data.” The opacity of the system does not allow for refining processes when difficulties multiply because the volume of transactions is so colossal that it is almost impossible to access precise information. While, in the consumer’s mind, the payment method is directly associated with the brand, when a problem occurs with a payment provider, it immediately reflects on the merchant. “It is an incredible responsibility that weighs on the payment players, confides Antoine de la Rivière. Maximizing acceptance by minimizing risk relies on massive use of data. We collect a large amount of data that is injected in real time into our proprietary AI models in order to always offer optimal performance to our merchants.”
Locating payment methods: not so simple!
According to the Fevad/LSA/OpinionWay barometer, dating from spring 2024, 65% of French e-retailers sell internationally, a figure up three points compared to 2022! While development outside France’s borders is a preferred growth lever for French e-retailers, many difficulties await them, particularly in the choice of payment solutions.
This is what Thibault Deslorieux, Director of Operations and International Affairs for Tikamoon, explains: “We must offer international standard payment methods but also provide local responses taking into account consumer habits.” As the brand gradually opens up to retail, the question of omnichannel payment solutions is becoming a focus of reflection. “We are working to standardize payment methods in our stores and online, in order to offer split payments and financing across all of our channels.” On the occasion of the upcoming inauguration of a store in Germany, it will be possible to pay directly by PayPal at the point of sale.
Security, omnichannel, customer experience… Whether it’s a Sisyphean test or a tantalizing torture, the reality of e-commerce and retail is this: the world of electronic payments is condemned to perpetual reinvention, forcing the entire sector to innovate relentlessly.
Source: www.ecommercemag.fr
