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4 Reasons Why Payment Initiation Services Are Effective Conversion Drivers

6. March 2019 / in Knowledge

Providers of digital business models or online services are all too familiar with the challenges: the next competitor is merely a click away. With conversion rates in the low single-digit percentage range, there is plenty of room for optimisation. Providers who attract visitors to their sites using powerful pay-per-click campaigns and sophisticated SEO tactics have to stay on the ball: every click has to count.

Conversion rates remain in the unsatisfactory range of 1-2% for many digital business models. It takes more than just appealing images, text and calls to action to catapult them upwards. Many visitors leave at the exact moment they have made their decision to go to the checkout. For many online providers, this process step is the problem child in the customer journey.

Integrated Customer Journey Fosters Trust

The market researchers from Comscore discovered that mobile users in particular get irritated by fragmented checkout processes and abandon them due to a lack of trust in a digital brand. In the pursuit of a self-contained checkout experience, there is always one thing that struggles to get over the line: the payment.

From the impression of the first page to shortly before checkout, online providers control the entire customer journey. However, the integrated overall experience often comes to a halt when it comes to payment: If customers are redirected from the online operator’s website to the site of a payment provider, the seamless customer experience is lost.

Some payment providers are themselves aware of the weaknesses inherent in this procedure. If this were not the case, prompts such as “Click here if you are not forwarded in a few seconds” would be meaningless. However, redirecting a customer to a third-party website is not only problematic from a customer experience point of view, it also entails financial risks and technical challenges to which many online providers are oblivious.

Why API Banking Is Good for the Conversion Rate

Some good news for all online providers: Thanks to API banking, tediously redirecting customers to third-party sites is no longer even necessary. Certified Payment Initiation Service Providers (PISPs) offer white-label payment solutions. This enables online providers to offer a secure and technically clean integrated payment service under their own brand in their checkout process.

The professional car broker abracar uses the white-label online transfer from FinTecSystems as its own brand: Under the name “abrapay”, buyers can immediately pay online for their car purchase in the look and feel of abracar.

The entire payment process takes place in the environment and look & feel of the actual brand, without the customer being redirected to the site of a third-party provider. Online providers use a widget supplied by the Payment Initiation Service Provider for this purpose. The widget can be fully customised to the design of the website and enables customers to complete the entire customer journey on a single provider’s site.

1. VisualWhite-label solutions reduce technical complexity and boost customer confidence.

We have identified four compelling reasons why your own payment service based on API banking and a white-label solution will increase your conversion rate.

1. Avoid Technical Problems

From a technical point of view, a white-label payment solution based on API banking is a direct transfer that the customer initiates in real time from their online account. There is no need to redirect them to third-party websites, banks or credit card companies. This helps to avoid technical problems such as disconnection when redirecting to the third party’s site, where the customer actually ends up returning to the provider’s page.

Online bank transfers are amongst the most secure payment methods available on the internet. The payment is secured by the “one-time” TAN issued by the customer’s bank. All data is transmitted in encrypted form between the customer, the bank and the certified Payment Initiation Service Provider via the banking API.

API banking is transforming the financial and online world. We introduce new technologies and business models in our White Paper: “Banking API: Interface for the Future”.

2. Minimise Financial Risks

Every conversion should ultimately generate increased revenue and profit for an online provider. However, this only works if a conversion leads to money being paid. With the help of API banking, real-time background checks can be carried out to check the customer’s solvency based on up-to-date transaction data from the online account.

In addition, the transferred amount is paid directly from the customer’s online account to the online provider’s business account. There are no retention periods and the amount is immediately transferred to the provider’s account. In turn, this has a positive impact on the cash flow and facilitates investments in the further development of the digital business model.

3. Boost Customer Confidence

From the customer’s perspective, the entire checkout process is transparent and integrated. Customers can bid farewell to annoying redirects to third-party sites, which often require you to fill in your details again. The irritations associated with this are eliminated whilst you reap the benefits of a much improved conversion rate. At the precise point where customers often abandon the customer journey, they now feel led by the hand until they cross the line.

4. Offer an Integrated Brand Experience

Differentiation in online business is one of the biggest challenges facing the operators of digital business models. Obvious factors such as value for money have long ceased to be a sustainable competitive factor, because large providers in particular are able to undercut almost any price at short notice. #

On the other hand, a payment service under your own brand has a positive impact on the customer’s overall experience, which contributes to an enhanced customer relationship. Especially in online business, where brand loyalty is not usually very high, long-term customer relationships are worth their weight in gold. And if white-label payment solution can offer any help in this regard, this investment would certainly be worthwhile.

You want to develop a payment solution in the look & feel of your brand? Many online providers rely on white-label solutions provided by FinTecSystems. Please get in touch! We will be happy to discuss all the options available to you.

Schlagworte: Knowledge

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