What is the Payment Conversion Rate?

Payment conversion issues can be caused by expired payments, blocked transactions, fraud, or even a poor user experience. To calculate the payment conversion rate, which is reported in a percentage, most organizations divide the total number of completed payments and divide it by the number of attempts.

In a one-month period, if 200 customers made payment attempts and only 185 of those attempts were successful, the payment conversion rate would be:

• 185 / 200 = 92.5%

Why It Matters

The higher a business’s payment conversion rate, the better off it’ll be. With the competitive landscape of online shopping, payment conversion rates are more important than ever. Businesses are up against tough odds, with 70.19% of shoppers abandoning their online shopping carts before they even get to the payment process.

A low payment conversion rate means that customers aren’t finishing purchases, leaving you low on revenue and cash flow. When those two metrics are jeopardized, it can be very hard to recover in the long term. So, while a single customer being unable to pay may not feel like it takes a toll, when that single customer turns into a handful of customers, the negative business impact is clear.

How to Improve Your Payment Conversion Rate

If you’re aiming to improve your payment conversion rate, you must assess the purchasing process from end to end. Are there any customer pain points that disrupt the process? Is your payment software secure and reliable? With so many factors at play, these are a few great actions to take early on:

1. Assess the payment software in use. With platforms like Eftsure, the customer payment process is approachable and dependable, giving peace of mind to everyone involved.
2. Monitor the reasons that payments are getting declined and create a customized approach for each. Instead of leaving customers with a big “denied” notice in front of them, use an alert like, “Something went wrong. Please try another payment method.”
3. Open up a range of alternative payment methods for customers. Bank transfers, Apple Pay, and Buy-Now-Pay-Later options are all popular amongst consumers.

Summary:

• The payment conversion rates highlight how many successful payments were made compared to the number of payment attempts made in a certain period.
• Businesses need to understand and track this metric because successful payment conversion is vital for business survival.
• If your payment conversion rate isn’t where you want it, consider adding more payment options, switching to a different payment processing software like Eftsure, and helping users troubleshoot and resolve payment issues.

References:

• akurateco.com
• stripe.com