Pre-Purchase Testing and Flexible Payments: Shaping the Future of Retail Transactions

As consumers rely more on online shopping, the importance of optimizing the payment process has never been more evident. With peak shopping periods like the holidays driving even higher consumer demand, retailers are focusing on pre-purchase testing and offering flexible payment options to ensure smooth transactions, according to Quantum Metric VP of Banking, Financial Services and Insurance Mike Hanson.

The rise of payment testing among consumers is reshaping the retail landscape, Hanson noted.

“Payment testing has become mission critical for any retailer that wants to drive an impact on customer experience and brand loyalty,” Hanson said in an interview with PYMNTS, adding the average consumer now visits a page two to three times before making a purchase. “Retailers who ensure that their checkout pages are optimized ahead of peak sales will see the best conversion rates and customer satisfaction scores.”

Pre-purchase testing also builds trust by offering customers the certainty that transactions will proceed smoothly, Hanson said, especially during the holiday season.

Indeed, consumers will abandon carts if their preferred method of payment isn’t offered. In fact, a PYMNTS Intelligence survey of 3,521 U.S. consumers showed 70% of shoppers decide where they shop online based largely on the payment options offered.

The surge in demand for buy now, pay later (BNPL) services highlights a change in consumer preferences regarding payment flexibility, Hanson said.

“The growing demand for BNPL services reflects a fundamental shift in consumer payment preferences,” he said. “Partnering with established BNPL providers, integrating multiple payment solutions, and clearly communicating payment terms can help businesses cater to this growing demand. The most successful businesses will be those offering both traditional and BNPL services to maximize satisfaction across different customer demographics. This flexibility has and will continue to become a key differentiator in the competitive retail landscape.”

Despite the demand for flexible payment solutions, the online payment process still presents challenges for many retailers, Hanson said. Common pain points include complex checkout forms, limited payment options, slow loading times and unclear error messages. Additionally, bandwidth issues can arise during peak shopping periods when businesses experience a high influx of customers. Retailers need to streamline their payment processes to reduce friction.

“Retailers can significantly improve the customer experience by implementing one-click checkout options that do not require customers to type in lots of personal information,” Hanson said.

He also stressed the importance of simplifying error messages, ensuring that users aren’t overwhelmed with unnecessary alerts, adding, “brands should also make sure this payment optimization is replicated across mobile channels and apps.”

Retailers must go beyond preparing for a single busy shopping day and create a consistent, frictionless checkout experience year-round, Hanson said.

“Most retailers should strive for checkout excellence year in and year out,” Hanson said. “This can be achieved by keeping a continuous view of payment friction points year-round through real-time customer insights and digital analytics.”

Tools such as session replays, end-user segmentation, anomaly detection intelligence and data visualization are helpful for identifying areas that require optimization, Hanson said. This approach helps businesses implement the necessary changes quickly, ensuring that the checkout experience remains smooth regardless of the season.

The preference for BNPL services from credit card providers reveals a convergence between retail and financial services, Hanson said, indicating consumers value integrated financial experiences.

This highlights the opportunity for brands to meet such demand with payment offerings, Hanson suggested. “BNPL is undergoing a significant marketing push by banks and credit card issuers — especially ahead of and during peak shopping seasons,” he said. “This often includes ‘extended pay’ options direct from the bank, enabling institutions to serve their customers directly rather than creating a market for third parties.”

Via existing customer relationships, financial institutions can offer payment solutions that combine security and convenience for an integrated shopping experience, he said. “This convergence of services reflects a broader trend, as financial institutions, retailers, and other industries compete to own more aspects of the customer’s overarching journey.”

Looking toward the future, Hanson stressed the importance of optimizing payment systems to cater to the growing number of online shoppers.

“Performance, such as responsiveness and speed, is paramount to the conversion and checkout experience,” Hanson said. “This is because any hesitation or delay in system response, including those caused by third-party integrations, negatively impacts the shopper’s journey. For optimized payment systems, retailers must prioritize streamlining both web and mobile app journeys to ensure all-around outstanding experiences. Success in the digital-first environment also requires transparent customer support systems for any payment issues. Combined, these factors will create a foundation for successful online retail operations that can scale with growing demand and changing shopping behavior.”

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