In 70 per cent of online purchases, the following happens.
Nabil is interested in purchasing a skincare product for his girlfriend as a birthday gift. He finds her favourite brand on an e-commerce site and proceeds to add it to his shopping cart.
At the checkout page, a prompt appears asking him to switch to his bank account to verify the transaction. He follows the instructions and logs in to his digital banking platform.
However, when he switches back to the e-commerce site, a timeout error occurs. Frustrated, he decides to abandon the transaction.
According to the Baymard Institute, 26 per cent of customers who abandoned their cart cited complex checkouts as the reason why they dropped off.
This points us to the root cause behind payment dropoffs - a poor customer experience.
Paying is the most stressful step in a customer’s journey on a platform. Yet, it is the most inconvenient.
The hassle to switch around apps during payments creates unnecessary additional steps before a transaction is completed. This opens up opportunities for a customer to disengage and drop off.
How can we change the current narrative of stressful and cumbersome payments?
Enter Open APIs.
Built upon the Open Finance framework (where banks and fintechs can openly and securely exchange consumer data with each other), Open APIs enable payments to be a one-click process that can be embedded within a platform.
By directly linking bank accounts to internet platforms including e-commerce sites, Open API providers like Finantier enable companies to offer in-app payments.
Besides eliminating the need for users to switch between apps during payments, Open APIs also enable merchants and users to skip traditional payment interchange platforms, creating cost savings for both.
Crucially for businesses, this increases customer engagement and reduces dropoffs, increasing conversions.
As internet and smartphone penetration in Southeast Asia increases, the internet economy will follow suit. According to the e-Conomy SEA report, the region’s internet economy is expected to be valued at US$300 billion by 2025.
While this figure represents a host of opportunities for digital companies, it also points to an increasingly competitive landscape.
The winning companies will be those who can offer the best experience to their users.
While companies may have different user journeys, they all end with a single goal in mind - purchase.
Therefore, it is crucial for companies to double down on making their checkout and payments experience as seamless as possible.
Eliminating the hassle
However, that is easier said than done.
Besides sourcing for agreements with different financial institutions for data transfer, companies also need to deal with the technical complexities of embedding payments within their platform.
Having been in a similar position before, we understand the frustrations companies face in integrating payments. Hence, we have done the hard work for them.
With our Payments APIs, we do the heavy lifting of data agreements and have simplified the technical processes, enabling companies to embed payments onto their platforms within hours.
Indonesia’s leading companies are already using our APIs to provide a more user-friendly payments experience, without spending a fortune on acquiring the necessary technical expertise.
Speak to us today if you are interested to learn how you can join them.
Summing it up
✅ Complex payment methods drive purchase dropoffs, resulting in lost revenue for companies.
✅ Open APIs can solve this problem by offering embedded payments, eliminating the hassle of switching apps and users dropping off.
✅ Companies that offer the most user-friendly payment experience will differentiate themselves in a competitive market.