According to research from the Baymard Institute, 70% of digital shopping carts are abandoned, with two in five adults stating complicated checkout processes as the main driver for abandonment. As e-commerce continues to expand, the online payment journey has become highly fragmented and consumer expectations of the digital experience have evolved. But things are changing – the payments ecosystem are solving these challenges through collaboration, innovation and improved user experience.

As digital shopping transforms, four key trends have emerged:

1. Increased adoption of online shopping, driven by consumer demand for speed and convenience.
2. Inconsistent digital experiences across the e-commerce ecosystem, due to an expanding array of online retailers and consumers shopping with multiple devices and browsers.
3. Multiple alternatives to traditional payment methods, with e-wallets gaining popularity, resulting in numerous online checkout options, like A2A/instant payment methods, domestic wallets, global wallets, Buy Now Pay Later players or browser autofill.
4. Security concerns of consumers to share their payment credentials and interact with a growing number of partners.

In today’s digital world, customers expect the same efficiency and convenience from online checkout processes that payment solutions like contactless have brought to in-person purchases. The current fragmentation of the digital checkout process has led to:

• 62% of customers giving up on a purchase after two minutes, yet currently the average time to checkout is three minutes. (Baymard Institute)
• 54% of consumers saying they would abandon a purchase if they felt the payment was insecure. (European E-commerce Report)
• 54% of consumers saying they would abandon their shopping cart if a company asked for too much information. (Capterra)

It is the merchants that feel the impact of consumers leaving the purchase due to high friction, a suboptimal offering or security concerns. Customers are increasingly looking for flexible payment options, choice, control and a simplified checkout experience, underpinned with safety, security and convenience. The Baymard Institue also found that merchants could see a 35% potential gain in conversion rates through checkout optimisation, such as offering an embedded digital checkout solution.

The advantages of embedded digital checkout solutions

Advanced payment technologies, like Mastercard Click to Pay, are revolutionising the digital payments landscape. They offer embedded, secure, and password-free checkout solutions; bringing the same level of security, simplicity and speed to e-commerce as contactless technology has successfully achieved in the physical world. These solutions do not only benefit consumers – they allow merchants to reduce shopping cart abandonment and increase stickiness for issuing banks. 

For shoppers, embedded digital checkout solutions offer a guest checkout that is facilitated through intelligent recognition, advanced security, and seamless user experience. This allows them to centrally manage their preferred cards within a single profile that is accessible across all devices, browsers, and channels. It is also powered by issuers who enable consumer enrolment through online banking which eliminates the need for cardholders to manually enter and save their card information with every merchant or having to remember passwords, streamlining the checkout process.

Moreover, introducing biometric capabilities for further security and speed allows shoppers to create and use passkeys for seamless payment authentication upon checkout. Passkeys replace passwords using biometrics, which are tied to payment credentials and backed by the latest security standard. Shoppers need to set up their payment passkey once by using a familiar method provided by their device, like a fingerprint or face scan, which is verified by their bank. Checkout is seamless at any merchant no matter how the shopper chooses to pay.

For merchants, embedded digital checkout solutions enable them to benefit from an enhanced checkout and more dynamic payment experience for their customers. Embedded solutions seamlessly integrate within the merchant's site, enhancing their existing checkout performance, and reducing shopping cart abandonment. These advanced payment technologies can also help boost approval rates and reduce fraud if they are securing each transaction with tokenisation. This allows for not only improved conversion but also ensures shoppers feel protected and valued.

For issuers, embedded digital checkout solutions introduce a smooth and familiar guest checkout that places issuer’s cards at their consumers' fingertips. Intelligent customer recognition enables password-less access to card credentials mitigating the need to manually enter them and the implementation of tokenisation significantly improves approval rates while reducing false declines and chargebacks.

Cutting checkout times in half – a use case

Embedded digital checkout solutions offer a seamless, familiar guest checkout solution embedded directly into the merchant’s page, so all cards can be managed in a single secure profile.
 
Technologies such as Mastercard Click to Pay or Secure Card on File operate by being embedded directly within checkout, creating a better user experience for consumers with fewer interruptions and buttons to click. With passkeys, the user simply uses their biometrics to authenticate the payment, and all cards can be managed in a single secure profile and updated automatically. This approach streamlines the checkout process for customers and makes it more user-friendly.

Last year NatWest Group was the first UK bank to enable Click to Pay for all its customers, making online shopping safer and easier by allowing customers to directly provision their cards to Click to Pay, enabling safer and more secure checkout online. We also recently worked with Norwegian Air Shuttle (NAS) to elevate its online flight booking process by implementing Click to Pay through the Mastercard Gateway across 12 different markets.

As a result, they more than halved their checkout time vs their standard guest checkout flow. The results showed a substantial consumer behaviour shift and interest in adoption with 20% of successful card payments powered by Click to Pay, all benefiting from a 3% uplift in approval rates.

Putting safety at the heart of innovation

Fraud has been a significant concern in the wake of the widespread shift to digital banking and e-commerce. Statista shows that since 2014, card transaction fraud has increased by an average of 8.9% per year and is predicted to reach $91 billion by 2028.

Embedded digital checkout solutions can protect customers, merchants and issuers from risk and fraud by combining the standards of EMVCo Secure Remote Commerce, network tokenisation and biometric authentication. This offers an additional layer of security by adding a dynamic component to each transaction, safeguarding sensitive personal information and payment details. These solutions extend the protection of a physical EMV chip to digital environments such as mobile and internet payments and enabling wallets for proximity. The implementation of authentication standards further contributes to increased conversion, approval rates and lower fraud.

Consumer expectations of the digital experience have evolved, and when it comes to online shopping, they don’t want to trade off convenience for security. Embedded checkout solutions are underpinned by rigorous security protocols while streamlining the payment process for customers and reducing shopping cart abandonment for merchants. Achieving the ideal checkout experience, these technologies strike the perfect balance between convenience and security, meeting the evolving demands of consumers.