The holiday season, like winter, is coming.
Singles Day (11/11), Black Friday, Cyber Monday—these officially kick off the holiday shopping season.
But this year will be a bit different.
Inflation and higher prices are making people tighten spending. This also means consumers will be more price conscious than ever and pickier in buying decisions.
In fact, to try and beat inflation,
48% of consumers will begin holiday shopping early, according to a Gartner marketing survey.
They’ll also most likely be even more sensitive to anything that makes buying more difficult.
This means payment service providers (PSPs), too, need to start making sure they’re ready for the holiday season early.
Here’s four things we think should be on their radar for the shopping season so they can help their merchants succeed.
1. The right security
Security is a consistent point of focus in payments. This is even more of an issue during the holiday season, when
fraud attempts jump about 30%. To add, consumers also don’t want their data stolen while getting gifts for friends, family, and loved ones.
So, one of the best things you can do as a PSP is make sure your security is in order to protect against fraud and data breaches.
This means your security protocols should be set up to maximise detection without declining payments. False positives will not only result in lost sales, but a potential drop off in new customers for your merchants because of decreased brand trust.
To prevent any security problems, you should also check your fraud management protocols and make sure they are optimised to run smoothly alongside your merchants’ campaigns for the holidays.
2. The right data
Next to upping your anti-fraud systems, you should look to complement these efforts with the right data.
E-commerce these days happens across multiple channels—online, in store, mobile, social media. When people shop, payments happen and that provides valuable data that can greatly improve conversion.
Chargeback rates, card types and digital payments being used, authorisation rates, and costs per transaction are all good places to start. And if you have strong data analytics tools that can interpret payment data, you’ll be an even bigger help to your
merchants, for the holiday season and beyond.
3. The right payment methods
The main thing about having the right data is so you can help your merchants increase conversion and optimise payments. One of the key datasets you should have as a PSP are payment method breakdowns for the countries where you offer payments.
This is because people won’t hit the buy button if their preferred payment methods aren’t available. And in 2021, local payment methods—digital payment methods used in a particular country or region—accounted for
77% of purchases online.
To give you an example, if you’re based in Germany and you have merchants selling in the Netherlands, they won’t get far without the iDEAL local payment method, which has a
70% e-commerce market share in the country.
So, given that, are you providing the right methods for the markets you’re targeting?
We know it takes quite a bit of time to figure all this out and integrate new payment methods.
But if you need to expand your options, and even processing capabilities, you can always look into bringing on a payments infrastructure provider or payments platform.
4. The right backup plans
Although the holiday rush may not be as busy as it was last year, you should still be prepared to handle significant volumes.
Of course, you probably already have multiple acquirers and processors to handle everything the holiday season can throw at you.
And although your payments will most likely run smoothly, it’s good to have a backup plan in case one or more of your acquirers or processors has any issues.
Part of this is having a clear communications plan ready to use with your merchants in case payments are disrupted. This can even cover customer success solutions such as giving discounts on transaction fees for the inconvenience.
Similarly, you should also consider creating internal protocols to manage disruptions. For example, if your credit card processor has a disruption, do you have a cross-functional crisis management team in place to troubleshoot? Do people in merchant-facing
positions like customer support and sales know what to and how to respond? What’s your plan of action?
Ironing out how you’ll respond to disruption scenarios and creating clear communication helps ensure when they do happen, everything will be kept under control. And if you’re prepared, it’ll go a long way towards letting your merchants know they’re your
main priority during this important time of year.
So, if you let all the above sink in and make adjustments where necessary, you’ll be well on your way to being prepared for the holiday season.
