How payment service providers and merchants can enhance the eCommerce payment experience

eCommerce is booming, with an estimated market worth to reach $9.3 trillion by 2027. Amid this growth, merchants face a raft of challenges, from the support of new payment methods and payment processing to fraud prevention, data security, regulatory concerns and ever-rising customer expectations. As merchants and payment service providers (PSPs) look to grasp the opportunities presented by an expanding channel, therefore, ensuring a safe and seamless experience is paramount. 

Currently, complex checkouts and a lack of trust are contributing to customers abandoning their shopping carts. Customers desire a secure shopping experience, but not at the expense of convenience. Too many friction points in the buying journey can frustrate customers, leading to lost sales. In fact, 70% of consumers prefer to checkout as a guest when completing transactions, likely due to the cumbersome processes associated with setting up new accounts. Conversely, too few security measures can expose merchants to the risk of compromised customer credentials, such as card details. 

Finding this balance is essential for maintaining customer loyalty, so how can PSPs and merchants find the sweet spot and deliver effortlessly secure services? 

The invisible shield behind eCommerce transactions: network tokenisation
Network tokenisation offers merchants the opportunity to prioritise both convenience and security in online transactions. It's a technology that's rapidly growing in popularity, with Juniper Research suggesting that it will be adopted in 85% of global eCommerce transactions by 2028. 

By replacing sensitive card information with unique tokens, network tokenisation enhances security by protecting sensitive data such as account numbers and expiration dates at every step of the payment flow. For example, Google Pay users can link their debit or credit card to their app. Upon linking, Google Pay requests a token from the card's issuing bank to uniquely represent the card. This token assigns a unique identification number that only the card network can match with the actual card data and the unique mobile device of user during transactions. 

With the primary account number (PAN) hidden, the risk of data breaches, identity theft or fraud is reduced dramatically. If hackers were to steal the token in a data breach, it would essentially be worthless to them. In addition to security assurances, with card details no longer stored, they can't become outdated and lead to declined transactions. 

For instance, when a card expires and is reissued, customers do not need to update their payment information with the merchant because the customer's token is automatically updated when the underlying card information changes. This reduces the risk of false rejections at checkout due to outdated card details, which can drive consumers to take their business elsewhere and result in significant estimated losses for retailers. With tokenised payments, customers enjoy a seamless payment experience, improving satisfaction and trust.

One-click checkout experience with Click to Pay
The challenge for merchants and PSPs in delivering an effortless experience is that the wide variety of cards, devices, forms, validations, and authorisations that form a modern checkout journey is complex. Integrating these imperatives into a customer-centric experience is not simple. For the customer, this means the payment experience is not always as fast, easy, and reassuringly secure as possible.

Built on tokenised technology, Click to Pay is a unified digital checkout solution that also offers a frictionless, consistent, and secure payment experience. It simplifies the online shopping experience with a single-click checkout and significantly reduces cart abandonment rates.

The ability to single-click or guest checkout eliminates the need for repetitive form-filling and card detail entries. Click to Pay is proving so promising that Mastercard is now working with merchants, banks, fintechs and other partners to phase out manual card entry in European eCommerce completely by 2030.

The complementary nature of Click to Pay and network tokenisation provides a powerful solution for merchants navigating the complexities of eCommerce payments. Together, these are elevating digital commerce experiences, enabling merchants to secure and satisfying journeys for every online shopper. They can envision a future where every purchase is not just a transaction but a moment of delight that builds loyalty.

Best practice strategy for implementation
Tokenisation and Click to Pay solutions offer promise, but the technology is largely evolving. Heavy lifting is needed behind the scenes to ensure that any deployments meet the requirements of merchants and payment processors. The start of implementation should include assessing current payment processes and identifying vulnerabilities where tokenisation could enhance security and streamline transactions. A comprehensive plan that outlines the integration steps, timelines, and resources is required.

A technology partner specialising in optimising eCommerce payment experiences should be selected as they can manage the relationships and connections with multiple schemes on behalf of merchants and payment processors, speeding up time-to-market and drastically reducing any complexity. This approach also ensures compatibility with existing systems and the implementation of necessary API integrations that support network-agnostic tokenisation across different payment networks.

Once implemented, training sessions for staff involved in handling payments should be conducted to ensure they understand the new tokenisation processes and security protocols. Additionally, they must understand compliance with industry regulations such as PCI DSS to safeguard customer data.

Preparing for future innovations 
Enhancing eCommerce with a secure and smooth shopping experience is critical for merchants aiming to thrive in a growing market. Reducing cart abandonment rates and fostering customer trust increasingly hinges on achieving the right balance between security and convenience. 

As we look to the future, the landscape of eCommerce payments technology will continue to evolve, driven by innovations that prioritise security, efficiency, and customer experience. One example is Secure Payment Confirmation (SPC), which will ensure customers are no longer pushed back and forth between the merchant's app and their banking apps, with purchases completed in just a single click within the same app. The SPC process will almost certainly reduce friction and, thus, customer frustration, as it embraces the core principles of security and convenience. Collaborations with specialised technology partners will be essential, enabling businesses to stay ahead of rapid technological advancements, such as SPC and regulatory changes, to provide that all-important seamless and secure shopping experience.