How to Optimize Your Digital Checkout for Better Conversion Rates

A checkout process is ultimately where a marketer’s spending will produce revenue, or disappear. According to Baymard Institute’s ongoing research, cart abandonment rate exceeds 70%, and checkout friction represents a significant portion of that problem. For a payment products manager, that rate is a clear call-to-action. A checkout audit is not something optional. That is the fastest path to identifying where money is leaking out without changing spend for acquiring products, or adjusting your product offerings.

Cashfree payments has been processing online payments since nearly a decade ago. This guide provides practical applications based upon our experience at Cashfree Payments, broken down into three parts of the payment journey: pre-payment, checkout and post-payment.

6 Principles of Checkout Optimization

1. Faster checkout

Baymard institute research on cart abandonment consistently places slow or confusing checkouts as one of the leading reasons shoppers walk away from completing a purchase. Every second longer at checkout costs you. Customers don’t wait around to change their minds. Once a customer has completed a fast checkout, they have no window in which to reconsider and leave. Maintaining intent high throughout the checkout process is important, and prevents customers from changing their mind about making the purchase.

2. Fewer inputs

Customer Convenience beats almost all other factors during the checkout process. Forcing account creation before purchase is a proven conversion killer. Baymard institute research lists creating an account before making a purchase among the top causes of abandoned carts with drop off rates tied directly to this single friction point exceeding 20 percent. Ask yourself only one question for each field on your form: “does this input block the payment from being made?” if the answer is “no” remove the field.

3. Inputs should be Validated

A majority of purchases online today are done via mobile. Even in the best of times, typing in addresses, card numbers, UPI VPAs, or net banking details carries a high probability of input errors. If the input is not validated as it is entered, users will face a payment failure. 33% of those users who experience a failed payment will abandon the checkout entirely, thereby lowering the conversion rate. Validating inputs (a small “Card number not valid” below the card number field) can prompt customers to review their information. Thus, this will avoid a payment failure for customers and safeguard your revenue better.

4. The Right Information at the Right Time

If you don’t support a particular kind of card network or are having issues with a particular payment mode, let the user know before they try to make the payment and the payment fails. This will help avoid a negative user experience, cart abandonment and poor conversion rate. It is more likely to ensure that a user completes the checkout and makes the payment.

5. Personalisation Helps – A Lot!

Saved preferences turn transactions into relationships. A returning customer who sees their preferred UPI app or saved card selected by default completes checkout Faster, and feels recognized. Use a subscription business example to illustrate this. A customer who has paid using UPI three times in a row should not need to select a payment method again. Display the first option, the one they previously used, by default.

6. Accessibility is Essential

Accessibility isn’t optional, it’s a conversion lever. Screen reader compatibility, adequate colour contrast, keyboard-only navigation allow more of your traffic to complete purchase. At minimum, ensure that checkouts support alt text on all payment icons and logos, visible focus states for keyboard users, and resizing text without breaking layout. Ignore these options and you’ll quietly discourage a segment of your paying customers from proceeding through your checkout process.

Now that we’ve discussed these principles, let’s have a look at an annotated checklist that details best practices in the 3 stages of pre-payment, checkout, and post-payment to maximise conversion rates, reduce cart abandonment, and give a great payment experience to your customers.

Pre-Payment Checklist

• Are you showcasing offers, discounts, EMIs, and Pay Later options on the product display page?
  Customers decide to buy based upon the value they perceive. When product pages present offers, discounts and Pay Later options prior to starting the checkout process order values and conversions are higher, according to multiple industry checkout studies including baymard institute research on transparency during the pre-purchase phase.
• Is a guest checkout accessible?
  Up to 35% of digital shoppers will abandon their cart if forced to make an account on an e-commerce website. So, having a guest checkout keeps your conversion rate high. You can always prompt the users to sign up once they place the order.
• Are you requiring users to log in?
  • If so, is login enabled via OTP?
    Most users will find it easier to log in via an OTP than to remember a username and a password. Therefore, always keep the ‘login via OTP‘ option available to make it more convenient for your customers to complete the transaction.
• Are you only taking inputs that are absolutely essential?
  The more effort the user has to make, the lower your conversion rate will be. Keep the inputs you take prior to payment to the bare minimum. For instance, just a phone number/email if no physical delivery is required. Just that and the address where it is! Keep asking yourself if this input is required to complete the payment. So, only have that input there if it meets that bar.
• Is there a progress bar or some indicators that users can see how many more steps there are?
  ~70% of users abandon carts somewhere in the middle of the purchase process. In many instances, this is due to frustration at long checkouts. Thus, having a progress bar will let your customers know how much longer it’ll take them to complete the checkout. This can reduce cart abandonment by 10-20%.
• Do you have an exit intent pop-up to avoid cart abandonment?
  Most internet users (rightly!) hate the pop-ups. However, an exit-intent pop-up with some good copy and social proof can help increase your conversion rate by 2-3% by preventing last-minute cart abandonment.

Checkout Checklist

Overall

• Are preferred or saved payment modes visible to all users?
  Payment mode visibility is important, but absolutely essential when dealing with returning customers. Showing them their preferred payment mode reduces the time taken to check out. Hence, it increases the convenience to the users – resulting in a higher conversion rate and a better customer experience.
• Are all offers and discounts accessible to users?
  Offers and discounts (including EMI and Pay Later options) are essential to increasing your conversion rate. By lowering the effective price paid front-up by the prospective customer, there is a higher probability of the customer completing the purchase. Unfortunately, a majority of checkouts have offers visible only after they are already on the payments page. [Check BNPL Plus – Display Pay later options, EMIs and offers on the product page – Boost conversions by 40%]
• If the user is a returning/logged-in user, are you asking for their phone number again?
  This is an important way that you can reduce user friction. Pass the user’s phone number from your system to the payment aggregator in an API call instead of forcing the user to enter it again to finalize the payment. So, this will make the payment flow smoother and increase the conversion rate.
• In case of downtimes or payment failures, are you prompting users to leverage an alternate payment method?
  Payment failures cause 33% of your users to drop once they have experienced them. So, it is better to warn them beforehand. Adding a warning that a particular method is facing low success rates and prompting users to leverage another method will substantially lower cart abandonment for your business. Thus, the conversion rate may not dip.

Card Payments

• Are Credit Cards and Debit Cards enabled on your checkout?
  This is a basic hygiene check if you want to keep your conversion rate high. Most businesses today should offer these modes of digital payments because they drive a substantial volume of total transactions. Needless to say, the highest-spending cohort of digital customers in India use cards.
• Are all 6 major networks – (Rupay, Visa, Mastercard, American Express, Maestro, Diner’s Club) available?
  Having all the major card networks available on your checkout will make for a better customer experience. This is because they will be able to use the payment method of their choice.
• Are all the card networks available shown via their logos?
  Visually depicting the card network logos will make sure that customers know which networks are available at your checkout. This will reduce payment failures and therefore, cart abandonments.
• Do you offer a saved card experience, compliant with RBI’s Tokenisation guidelines?
  A saved card experience makes it easier for a customer to pay when they return to your checkout. Therefore, it drives better retention for your business – especially for high-value customers.
• Are all card inputs – card number, expiry date, etc. – validated?
  Typing in card details can be tricky, and involves entering 15-20 digits. On a mobile checkout, this can be tricky and is prone to error. A validation check will prompt the user to check their details before they proceed to the next step. This will make it more likely that they will complete the transaction.
• Do you offer CVV-free payments on saved cards?
  A CVV-free payment experience will drive a 10-15% higher success rate. It will reduce cart abandonment by making the checkout process that much easier and faster. Thus, the conversion rate will also improve.
• Do you offer NFC-enabled card details auto-fill on your checkout?
  Since entering card details can be tricky, it is best to reduce that friction by automatically fetching these details. It will be more convenient for customers. Leveraging Near Field Communication (NFC) technology, today’s smartphones can auto-fetch card details if customers hold the cards above the smartphone. Thus, it becomes seamless to enter these details. You should definitely have this on your checkout if you want to shoot up your conversion rate.

UPI Payments

• On web checkout – are you offering a UPI QR code scanning experience?
  Even those transacting on your website via their desktops will need their mobile phones to complete UPI payments. A UPI QR code to scan makes it much easier for them to complete the payment on their smartphones.
• On mobile/app checkout – are you offering a UPI Intent flow?
  UPI Intent is the most preferred way to pay with UPI on digital checkouts. It offers a substantial improvement in both success rate and user experience compared to UPI Collect.
• Are you using an SDK to show the user the apps installed on their phone?
  UPI Intent is made more effective with an SDK that automatically throws up the user’s currently installed UPI PSPs. This increases conversion rates and customer satisfaction.
• Are you validating and verifying UPI IDs when they are entered?
  UPI Collect is still used by a substantial number of users to complete their UPI checkout. Having a VPA validation and verification avoids payment failures.
• Do you offer In-app UPI flows?
  In-app UPI is the fastest-ever and most failure-free way for customers to pay via UPI on digital checkouts. By removing the need to be redirected to a UPI PSP and only requiring the entry of a UPI PIN, businesses such as yours can offer the fastest and most conversion-friendly checkout experience to their customers.

Netbanking Payments

• Is Netbanking enabled on your checkout?
  Netbanking is not a very popular payment method. Nevertheless, customers often prefer it when they are making large purchases since this avoids UPI payment or credit card limits.
• Does your bank list showcase the top banks?
  It is most effective to place the most popular banks at the top of your net banking flow. There are well over 70 banks in India that offer digital net banking services, but the top 6 banks hold >80% of all accounts. Placing them up front will make the checkout process more convenient for customers, which can improve the conversion rate.
• Do you have >70 banks available?
  Having a wide variety of banks available in net banking ensures that you can serve all customers, even if they hold an account with a relatively unfamiliar bank. So, make sure that you have a broad selection of banks available.
• Are you offering EMIs on Netbanking?
  Some banks are now offering EMIs on Netbanking. This can be a conversion and order value enhancer for net banking users. So, it is something your business should have to maximize the potential for converting these customers.

Wallet Payments

• Have you enabled digital wallets on your checkout?
  Digital wallets continue to be a favoured payment mode for some customers, and you should have them available at your checkout.
• Do you have >7 wallets available on your checkout?
  The top 7 wallets contribute ~80-90% of the transactions processed in the digital wallet ecosystem. Having more than that will ensure that most people wanting to pay via a digital wallet will have the ability to choose a wallet of their choice.
• Is wallet link-and-pay available on your checkout?
  Wallet link-and-pay enables users to make one-click payments via digital wallets on your checkout, basically saving the wallet as a payment method. This is useful for digital wallet users.
• Are the top wallets showcased on top of your list?
  Most users prefer one wallet on which they have a loaded value. Therefore, it is important that they can access the wallet they wish to use easily. Having your list of wallets represented by their use can improve accessibility and enhance the checkout conversion rate.

Card/Cardless EMI Payments

• Are CC, DC, and Cardless EMIs enabled on your checkout?
  Credit Cards, Debit Cards, and Cardless EMIs drive considerable volumes, especially for high-value items and premium SKUs. This includes furniture, electronics, 
• When customers enter valid Credit/Debit card numbers, is there a prompt that shows EMIs are available?
  Input validation checks prevent payment failures resulting from incorrect entry of credit card numbers. Placing a validation check here can ensure that customers correct typographical errors as they happen. 
• Is there an eligibility check flow for EMI payments?
  Eligibility checks are critical for customers who are trying EMIs for the first time. These checks let the users know whether or not they can use EMIs. Hence, it prevents them from abandoning the cart due to an error message. 
• Are the EMI terms clearly called out (instalment, duration, interest, etc.)?
  Giving this visibility to EMI users lowers abandonment. The lack of this information will make a user reluctant to complete the transaction.
• Are you showcasing the top providers?
  Your checkout should default to showing the top card and cardless EMI providers to make it more accessible to customers using this payment mode.

Pay Later Options

• Have you enabled Pay Later options on your checkout?
  Pay Later options are new-age solutions for credit seekers who either don’t have or don’t wish to use their bank account-linked instruments to avail quick and easy credit at checkout. You should enable this on your checkout, especially if you have high-value or premium SKUs at a high price point (>₹1000).
• Is there an eligibility check flow for BNPL providers?
  For those who are new to availing of the Pay Later options, an eligibility check will quickly let them know whether or not such options are available to them. This will drive a higher success rate and a better user experience.
• Are the Pay Later terms clearly called out (instalment, duration, interest, etc.)?
  Giving this visibility to Pay Later prospects drives lower abandonment. The lack of this information will make a user reluctant to complete the transaction.
• Are you showcasing the top providers?
  Your checkout should default to showing the top BNPL providers to make the more popular options accessible to customers using this payment mode.

Post-Payment Checklist

• In case of failed payments –
  • Is there a retry prompt?
    At the point of a payment failure, 33% of users churn and abandon checkout. Having a quick retry prompt tends to reduce churn caused by payment failure, and reduces your cost of customer acquisition.
  • Is the reason clearly indicated for user convenience?
    If a payment fails but no reason is provided, it makes the user not understand what has gone wrong. With ~80% of all payment failures connected to user action, it is much more effective to indicate the reason (incorrect CVV, etc.) in language that the user can understand.
  • Are you suggesting the right next step? (i.e., if customers enter the incorrect CVV, are you letting them know that the CVV was incorrect and that they should try again with the same card?)
    This is connected to the previous point. If there has been a user error, the user should be prompted to correct that and complete checkout. If there is downtime or if the mode is showing low success rates, you should prompt the user to try another payment mode.
  • If customers do not retry the payment, do you send an SMS/E-mail/both with a payment link?
    This is a tried and tested way to recover abandoned carts and drive up your overall conversion rate. By sending communications to churned prospects, you are far more likely to get a conversion because your intent has been expressed.
• In case of successful payments –
  • Is there a payment successful and order confirmation screen?
    It is important to let the user know that their payment was successful and the order was confirmed.
  • Is the user then being redirected back to the right place in your ecosystem?
    This varies depending on the type of business you are in. For example, with a food order, the next screen post the order confirmation should show delivery timelines and give a brief summary of the order.
  • Is the user then being redirected back to the right place in your ecosystem?
    Sending an email/SMS confirmation helps users track their orders and ensures a complete user experience.

We hope that you found this useful. If you want to have a free audit conducted of your checkout and payment flow, the experts at Cashfree Payments would be more than happy to help you. Click the button below to express your intent for a payments audit in the form below, and our experts will be in touch.

FAQs

What is Checkout Optimization?

Checkout optimization refers to reducing friction within a merchant’s checkout flow to allow more shoppers who begin checking out to ultimately finish doing so. Examples of checkout optimizations include optimizing forms for easier input, providing multiple choices for payment types, improving page load speeds, and providing various trust indicators.

What is a good checkout conversion rate?

A good checkout conversion rate is defined as being above 70% for completing the checkout flow when reaching the payment screen; while below 50% indicates there is substantial friction present in the flow that needs to be audited.

Is offering guest checkout better than forcing account creation prior to checkout?

Forcing shoppers to create an account prior to making a purchase is one of the most commonly cited reasons for shopping cart abandonment. Provide guest checkout as the default option and ask the shopper if they would like to create an account after the order has been confirmed, rather than requiring them to do so before purchasing.

How many payment methods does a checkout need to provide?

You want to provide enough payment methods to satisfy your customer base, but not overwhelm the payment screen. Typically for most businesses operating in India this includes cards, UPI, net banking and at least one type of wallet/ Pay Later option.

How long should it take for a shopper to complete a checkout?

If the shopper is logged in and their information is saved then under 90 seconds is acceptable. If the shopper is logging in as a new guest, then under three minutes is acceptable.

Must mobile checkout have a different approach than desktop checkout?

Yes. Shoppers using mobile devices require larger “tap” targets, autofill capabilities, and native mobile “payment” options such as UPI Intent vs. scaled down versions of desktop checkouts.