Adapting to the specific requirements of various markets might be essential in the ever-changing world of e-commerce. One such difficulty is finding the ideal balance between fraud protection and a flawless customer experience throughout the payment process. In this article, I'll show you how we tackled this challenge by removing the 3D Secure authentication step and the significant impact it had on e-commerce sales in the US market.
Importance of payment process on user experience in e-commerce
The payment process is not just a mere transactional step in the ecommerce checkout process; it is a crucial element that can make or break the overall customer experience. Studies have shown that a seamless payment experience holds immense significance, as it directly influences customers' purchasing decisions. According to SaleCycle, 26% of consumers abandon their shopping carts due to the frustration caused by a complicated and convoluted checkout process.
Customers' patience and trust in the brand begin to dwindle when they encounter difficulties during the payment phase, such as lengthy forms, a lack of payment options, or confusing navigation. It directly impacts the increased rate of abandoned shopping carts.
Adapting payment process to the nature of specific markets
When expanding into new markets, businesses must prepare for their payment challenges. One of the most important considerations in ecommerce is handling multicurrency. Other factors, such as preferred payment methods, popular digital wallets, and even cultural attitudes towards specific payment options, can greatly impact the success of an ecommerce venture. For one of our ecommerce clients operating in the US market, the payment element that needed attention was 3D secure. This example brilliantly demonstrates how a single factor affecting the User Experience can significantly impact e-commerce sales.
Our case study
This case study focuses on one of our clients specializing in e-commerce. It is a European company that operates mainly in the US market. When working with our clients, we always aim to create technical solutions for them and support them from the business side. In this case, we wanted to help solve the problem of high failed transactions.
Understanding the Problem
The first step with this type of action is to try to understand the problem. We started by analyzing the situation and looking for the cause of the high rate of failed transactions, which was 6%. The company observed many failed transactions arising from the robust fraud protection measures triggered by 3D Secure. While 3D Secure is widely adopted and considered a standard in the European market, it was less widely embraced in the US. This divergence in adoption rates and customer expectations between the two markets raised important questions. We wondered if the stringent security measures of 3D Secure were creating friction in the purchasing process, leading to an increased number of failed transactions and potential customer dissatisfaction.
Making changes
After extensive discussions with stakeholders and clients from the US market, we thoroughly analyzed the challenges posed by the 3D Secure authentication process. We recognized that while 3D Secure was a vital safeguard against fraudulent activities, it became a potential roadblock leading to failed transactions. Considering the insights gathered from these discussions, we hypothesized that by removing the 3D Secure challenge, we could strike a balance between reducing the number of failed transactions and managing the potential risk of increased fraudulent activities.
A/B tests
To test our hypothesis and gain concrete insights, we opted for an A/B test, a widely recognized method in experimentation. We implemented the changes by removing the 3D Secure authentication step for a subset of users. This allowed us to create two distinct groups: the control group, which followed the existing authentication process, and the experimental group, where the 3D Secure authentication step was eliminated.
The duration of the A/B test spanned over 30 days, providing us with valuable data and observing the effects of the change. Throughout this period, we closely monitored and analyzed the results to assess the impact on various key metrics, focusing on sales performance.
Results
The results of the A/B test surpassed our expectations and yielded remarkable outcomes. The number of failed transactions for the control group was 6%. The experimental group's rate dropped to an astonishingly low rate of just 0.8%. This significant reduction in failed transactions was a resounding success, as it directly addressed the company's primary concern of improving transaction success rates and user experience. These results confirmed our hypothesis and empowered us to introduce changes fully.
The Impact of Removing 3D Secure on E-commerce Sales in the US Market
Improved User Experience
By eliminating the additional step of 3D Secure authentication, we created a more streamlined and frictionless user experience for our client's customers. This change removed a potential barrier in the checkout process, allowing customers to complete their purchases easily.
Adapting to Market Needs
The case of 3D Secure highlights the importance of understanding the specific requirements and expectations of different markets. While it may be a standard practice in one region, it may not align with the preferences or norms of another. By recognizing this discrepancy and adapting to the needs of their target market, we demonstrated their commitment to providing an optimized shopping experience.
Sales Growth and Future Prospects
The significant reduction in failed transactions not only resulted in a smoother checkout process but also had a direct positive impact on sales. With fewer customers encountering obstacles during payment, conversion rates improved, leading to a surge in completed purchases. This success prompted our client to fully introduce the change and capitalize on the newfound growth potential.
Conclusion
Removing the 3D Secure authentication step proved to be a game-changer for our client. By recognizing the divergent standards between different markets and taking a data-driven approach, they enhanced the user experience, reduced failed transactions, and boosted sales. If you want to build a mobile app for e-commerce or improve your current one, feel free to contact us and let’s talk about how we can help you.
