"Abandon basket", "abandon browser", "click-through", "conversion"… These buzzword metrics might be the mantra of digital marketers, but they're the lifeblood of online shopping.

At their core lies the beating heat of the eCommerce industry – customer experience.

Sure, having a great product range and standing out in Google searches is important. But what clinches the sale like nothing else is how enjoyable (read: easy) the customer finds their journey from search engine, to shopping cart, to successful checkout.

There are many ways retailers can improve customer experience on the front end – but it's all for nought if the customer abandons their shopping basket at the final hurdle, frustrated by a lengthy payment process or a lack of payment options. 

Simply offering credit or debit won't cut the mustard anymore. These days, customers want to be footloose and financially free, expecting more ways to pay than ever. 

What alternative payment options are available?

Other than the traditional debit or credit and – ol' faithful – cash, what other payment methods are available for shopping online? And which of these digital payment solutions are popular in the mainstream market?

Well, digital wallets and "buy now, pay later" (BNPL) models are tried and tested. And while "cryptocurrency" is a term that's probably reached your nan's ears by now, there's probably no need to rush into that one just yet.

Here's a quick overview of the two key payment options that could put your operation at a competitive advantage this year, as well as a few important technical bits to bear in mind. 

Digital wallets 

What has been affectionately dubbed "the wallet's digital renaissance" is a trend that does exactly what it says on the, err… purse.

People are ditching leather and plastic for one-stop digital shops. These online wallets act as safe places to link bank cards, gift vouchers, loyalty cards and even event and transport tickets – without the bulging pockets.

A major appeal is security. Encryption and tokenisation hide bank details, protecting against fraud and scams for both customers and merchants.

Embedded authentication also helps. Two-step authentication requires customers to confirm their identity in a multi-step process (usually through a fingerprint or password) when making mobile transactions. While this process offers more security for both parties, it's a step backwards in terms of making payments easier and faster. It's slow – and sluggish payments beget abandoned carts.

Digital wallets solve the problem by having this process embedded in the wallet, creating a more seamless shopping experience. 

Popular digital wallets are Google Pay, Apple Pay and PayPal. There's also Venmo, Zelle, and Walmart Pay – but they're predominantly (or exclusively) for the US market, for the time being. 

A key thing to consider when offering digital wallet payment options is that each popular app has different features.

Apple and Google Pay methods are "pass-through" wallets, meaning they function in lieu of a bank card. This makes them a popular choice for contactless payments in-store. Retailers must be able to receive both services to avoid limiting themselves to either Apple or Android customers.

On the flip side, stored-value wallets such as Paypal need to be loaded with funds before payments can be made. They also charge fees to the merchant – usually a fixed fee and a percentage of the transaction. 

BNPL (buy now, pay later) 

The buy now, pay later model has been growing in popularity recently. In fact, more than 55% of Brits have used a BNPL service in the last year, according to a collaborative study between IMRG (eCommerce insights) and Justt, a fintech start-up specialising in credit chargeback mitigation.

It's easy to see why. Who wouldn't like to spread the cost of bigger purchases or make Christmas a little more manageable, without paying interest?

Klarna might be the big name on everyone's lips (and on everyone's phones). However, this Swedish bank follows in the footsteps of classic players like PayPal. There's also a plethora of fintech apps on the market – Payl8r, Laybuy, Afterpay, Zilch… The list is surprisingly abundant.

All offer the same principle: the ability to stagger payments or delay payment to a later date. By offering this method, online retailers can benefit from the fact that "wait until payday" is no longer an obstacle for the browsing customer. 

The cost-of-living crisis has accelerated consumer appetites for this form of short-term loan. However, a focus on payment flexibility, budgeting and personal finance has been growing steadily for a few years at this point. Debit and credit cards remain the most dependable finance option, but as new generations of consumers come through, retailers need to be aware that their customer base is becoming more financially savvy – and are looking for new ways to budget where every penny is starting to count.

Merchants looking to offer BNPL should be aware that this form of financing is not as closely regulated as credit cards. Some only run soft credit checks for customers, which can be good (as it's fast and easy) and bad (it's less rigorous).

This can impact both buyer and seller. Retailers should ensure that their BNPL offering is harmonious with the returns policy and that it's clear to consumers to avoid confusion. Make sure they understand whether they must continue to repay the instalments while waiting for the return to be accepted. Missed BNPL payments can impact credit scores. 

The bottom line

Whether it's diving into digital wallets or branching out into BNPL, it's all about the money. Financially squeezed and technologically savvy consumers are heading into 2023 willing to shop around for brands that offer choice "on the shelves" and "at the checkouts". They're not just looking for great-value products, but also budget-friendly forms of credit – both traditional and new – that they can easily access from a desktop or mobile. 

Retailers that continue to be reactive and smart can meet consumer appetite for payment flexibility and will benefit from a competitive advantage in challenging trading conditions. 

As one of the UK's most 3PL fulfilment providers, Stowsafe Fulfilment is well-equipped to support operations in a time when flexibility, adaptability and reactivity are critical. Find out more about growing your brand with us.