Checkout And Payments Now Play a Key Role in the Customer Experience, a Paysafe Study Finds

Checkout is gaining a higher profile in payments, and that’s influencing customer retention as well as a merchant’s ability to attract new customers, says a new study from Paysafe Ltd. That means modernizing checkout needs to be at the top of brick-and-mortar merchants’ to-do list in 2023, the study adds.

Overall, 86% of respondents in the Paysafe study, “Lost in Transaction: The U.S. In-Store Business Payments Outlook for 2023,” say payments and the checkout experience are important for retaining existing customers, and 82% agree it helps in attracting new customers. As a result, 70% of respondents say it’s a priority for them to integrate new payments technology in-store, and 69% agree they would like to reduce the time their customers spend at checkout.

Other overarching trends to emerge from the study include 55% of respondents saying their payment options are in line with customer expectations, and 41% saying there could be room for improvement in the payment methods they offer. The latter result is an acknowledgment by some merchants that they’ve missed out on sales by not offering consumers’ preferred payment methods, the report says. In addition, 5% say they don’t offer all the payment methods their customers want, and that their business would benefit from accepting more types of payment.

Paysafe in October surveyed 200 small and medium-size brick-and-mortar businesses based in the United States to map payment trends and gauge merchants’ appetite for new technologies. The company, a major payments provider in the U.S. and European markets, conducts the survey annually.

A key starting point for modernizing the checkout is to add more digital payment options, according to the study. While fixed-terminal card readers are now used by 65% of respondents, up from 59% in 2021, 49% of respondents want to offer smart phone-driven solutions within the next two years. These include QR codes, which allow customers to scan and pay for items on-site using their phones.

Contactless payment readers are another checkout technology small and medium size merchants are using, with 54% of respondents deploying the technology, up from 47% in 2021.

And some 53% of respondents are offering tap to pay capability to modernize their checkouts. Digital and mobile wallets are also being adopted by a substantial percentage of merchants, with 50% and 46% of respondents, respectively, saying they have installed those payment options.

But cash acceptance still remains highly popular, with 91% of respondents accepting cash, up from 89% in 2021. Of the companies that accept cash payments, 85% say they plan to continue accepting it over the next one to two years. Increasing the popularity of cash among consumers is that 24% of merchants give discounts for cash payments. Nevertheless, 19% of merchants indicated they’ve been moving toward not accepting cash, and 19% agree they can offer a better experience by eliminating cash altogether, as the move would reduce the risk of theft of cash stored on premise.