Understanding the difference between good and great conversion rates is key to e-commerce success. By analyzing user behavior, streamlining checkouts, and offering options like Swish, businesses can maximize sales and foster loyalty.
Conversion can be seen in many contexts, such as currencies, marketing, and sales. In e-commerce, we mostly refer to conversion when we want to know how well a store or a purchase-flow performs. It’s the ultimate measure of how effectively you’re turning interest into revenue – meet payment conversion.
In the world of online shopping, the checkout process is where sales are either won or lost. You’ve invested time and resources in marketing, optimising your website and attracting customers to your store. But if your payment experience isn’t seamless or targeted to your audience, all those efforts could go to waste, lowering your payment conversion rate.
– While it might be tempting to choose a payment provider with lower transaction fees, this decision can backfire if it doesn’t deliver equal or better conversion rates, says Jonah Olsson, CEO at Mondido.
– At Mondido, we prioritise creating a payment checkout experience that maximizes your store’s conversion, because even small improvements in this area can have a huge impact on your revenue, Jonah continues.
The impact of checkout conversion rates
Let’s look at the difference between an 85%, 90%, and 95% payment conversion rate for an online store with 10,000 customers starting the checkout payment flow each month and an average transaction value of 800 SEK:
- At an 85% conversion rate, 8,500 transactions are completed, generating 6,800,000 SEK in revenue.
- At a 90% conversion rate, 9,000 transactions are completed, generating 7,200,000 SEK in revenue.
- At a 95% conversion rate, 9,500 transactions are completed, generating 7,600,000 SEK in revenue.
The difference between an 85% and 95% conversion rate is a staggering 800,000 SEK in additional monthly revenue, or nearly 10 MSEK annually. Even the 5% jump from 85% to 90% nets an extra 400,000 SEK per month.
These aren’t just numbers, they represent a true potential in your checkout payment process!
The hidden costs of lower transaction fees
When comparing payment providers, it’s easy to focus on transaction fees as a way to reduce costs. However, lower fees won’t necessarily result in higher profits if they come at the expense of conversion rates.
A well-designed payment experience drives sales
Lower transaction fees are irrelevant if a clunky payment experience leads to abandoned carts. A 0.5% lower fee won’t make up for the revenue lost from even a small dip in conversions.
Revenue loss adds up
Imagine saving a fraction on transaction fees, but losing 5% or 10% of potential sales because the new provider’s checkout isn’t optimised. The “savings” quickly turn into a net loss.
Customer experience is key
Customers value a quick, user-friendly payment process that mirrors the look and feel of the store they’re shopping in. Moving the customer to a new site with a different look and feel reduces the likelihood of completing the purchase.
Your Conversion is Our Conversion
At Mondido, we are driven by high conversion rates. To us it is important that your customers have access to payment options they trust and prefer. This, together with a well-designed payment experience, leads to higher completed purchases and increased revenue.
For example, by adding the popular payment method Swish in Sweden, our merchants have seen an increase of up to 10% in revenue. See our press release (in Swedish). This highlights the power of aligning your payment methods with the preferences of your target audience.
Reach out today to add local payment methods to your checkout! – Send us a message or sign up for an account.