Shopping cart abandonment is a perpetual problem for e-commerce merchants. As many as 70 percent of all online shoppers abandon their carts; 22 percent reported doing so because the checkout process was too long or too complicated.
While there are no shortage of strategies for merchants to reduce their cart abandonment rate, one of the most reliable – at least, when it comes to addressing the “complicated online checkout process” issue – is card on file payments. Returning customers can check out without manually entering all of their card details. All they have to do is choose a previously used card from their digital wallet. (Depending on the specific way the merchant has set up cards on file, the customer may even be able to re-use a payment method that was previously used in person or over the phone – not just on the merchant’s website.)
The Technology Behind Card on File Payments
Behind the scenes, card on file tokenization makes this entire process possible.
The first time a customer makes a purchase with the merchant, they provide all the required details: their full card number, the security code, and the expiration date. From there, the payment processing software creates a unique token. The merchant stores that unencryptable token – not the physical cardholder data – on their system, which means there’s less sensitive data that they need to keep secure.
The next time the customer makes a purchase, the merchant references that token to charge the customer’s card on file. This is more secure for the merchant, who doesn’t have to process, store, or transmit the cardholder data – and it’s much more convenient for the customer, who doesn’t have to find their credit card or type out the same payment information over and over again. With less of a reason to abandon their cart, shoppers are much more likely to successfully complete the intended transaction.
Card on File Payments Don’t Just Reduce Cart Abandonment – They Increase Authorization Rates As Well
A merchant’s authorization rate refers to their percentage of successfully approved credit card transactions.
A high volume of declined transactions can impact a merchant’s bottom line nearly as much as a high cart abandonment rate. Some e-commerce merchants that use tokenization for card-on-file payments report up to 10 percent higher approval rates when compared to traditional checkout methods.
Card-on-file payments can still be declined if the transaction would put the cardholder over their credit limit or if they have insufficient funds, but these transactions are far less likely to be declined for incorrect credentials. This can prevent a considerable amount of lost e-commerce revenue.
Learn More About Card on File Payments
Curbstone’s online payment processing solutions have helped hundreds of e-commerce merchants deliver a better online shopping experience for their customers.
Interested in discovering a better approach for your organization? Contact us today to learn more about fast and secure card-on-file payments.
