The Definitive guide to Managing Payments for online businesses

Illustrations by Drishya Subramaniam

When shopping online, few think about what goes on behind the scenes after they press “Pay.” And that’s how it should be: when you pay for your Uber or order food from Swiggy, the Payments Experience should be simple and seamless.
But, it can get complicated.
As you scale, you handle more and more Payments. And delivering a simple and seamless experience for your customers starts to pose a challenge. An even bigger challenge becomes managing the scale and performance of your Payments Stack.

Before we dig deep, let us take a look at some of the benefits of managing payments.

The Benefits of Managing Payments: An Overview

Growth is the lifeblood of any business and Payments are an important part of the journey. Effectively Managing Payments leads to better conversions, better customer experience, and ultimately more revenue for your business.
We’ll discuss this at length in this article. But, we’ll leave you with the most important insights here.

1. Payments Catalyse Growth and Agility: By taking control of your payment ecosystem, you can effectively improve payment conversions and optimize costs. For instance, having a customized and user-friendly payment interface can lead to higher customer satisfaction and ultimately, increased sales. The flexibility of sequencing the payment methods in a specific manner - like showing UPI on top, or showing saved payment methods, ensures that you nudge the customer in the right direction.

2. Future-proof Your Business: Complete control over your payments allows you to enter new markets and launch products quickly. It will ensure that you can customize your payments ecosystem as per your requirements. These requirements can range from integration of new payment aggregators / payment methods or creating advanced flows like seamless subscriptions, 1-click checkout options etc. This adaptability ensures that your business remains competitive and relevant in an ever-changing market.

3. Customize the Payment Experience: Align the payment experience with your brand guidelines and cater to different markets, products, or customer cohorts. Offering a personalized and consistent payment process will boost customer loyalty and improve overall user experience. Your UX should not be at the mercy of your payment gateway.
Key takeaways.png

Let’s take a deeper look at the Payments Stack and the three layers that comprise it.

The Payments Stack

Payments are complicated. Integrating new Payment Methods to cater to customer’s changing preferences, onboarding multiple Payment Gateways to handle scale, routing payments, optimising checkout experiences, driving conversion, settlements - it’s a mighty machine. All these parts and pieces are collectively known as “The Payments Stack.” It’s the collection of all of the different layers that make up Uber’s or Swiggy’s Payment ecosystem.
Systems need to be simple and effective. The Payments Stack can propel your business to greater heights, but you need to engineer it a certain way to ensure that it is an accelerant in your Growth Engine.

Payment stack.png

The Three Layers of Payments Experience

The Payments Stack consists of three layers working in unison to deliver a simple and seamless Payments Experience to you customers. The First Layer is the Front-end, the customer facing layer. The second layer is The Back-end, where all the Payment Processing happen. The third layer is the operations layer, which consists of Data, Reporting, and deep analytics.

- Layer 1: Customer Experience in Payments (The Front-end)
- Layer 2: Payment Processing behind the scene (The Back-end)
- Layer 3: Data, reporting, and deep analytics (The Payment Ops)

Let’s dive a little deeper into each of these and understand how can you effectively manage these layers for your business.

Layers of Payment Experience.png

Layer 1: The Front-end Customer Experience Layer

Customers are diverse and their preferences even more so. We use different Payment Instruments throughout our day - Cards for Cabs, BNPL for food, UPI for shopping our heart out, the list potentially goes on.
Consequently, delivering a great customer experience while balancing the broad spectrum of Payment Instruments poses quite a challenge.
Ultimately, it’s all about conversion.There’s no one-size fits all solution to this. And a lot goes behind getting your customers to press the “Pay” button - from laying out payment options to allowing you to ‘save a card’ for future use to automatically inputting OTPs.
Let’s explore the Front-end in more detail.

What is a checkout page and why should you optimize it?

A great product that your customers love is a huge win but the trophy is them buying the said product from you. The checkout is the final lap where the customers (making payment) and you are at their most anxious. This is where a great Checkout Page Design (both form & function) can steer you towards a great customer experience.
What is a checkout page and why should you optimize it_.png

Optimizing your checkout experience entails making it faster, more efficient, and frictionless.

Why do it?

On average, 70% of checkouts are abandoned, based on a collection of 41 separate studies.
Customers can abandon carts for a variety of reasons. Perhaps you didn’t have their preferred payment method, the design was confusing, or worse, the page was poorly designed. This hurts your conversions and leads to lost revenue.
Abandon carts_.png

Creating a simple, accessible, and high-performing checkout experience improves the buying experience for customers, reduces cart abandonment and improves conversions.

The Three Types of Checkout Experiences

A huge percentage of your customers will be using their phones to browse your website/app. Hence, it is essential to optimise the checkout experience for mobile users.
Technically, there are three ways to implement a checkout:
1. Native Checkout: (aka In-App Checkout) Entire customer interactions happen within your app. It gives the best checkout experience in mobile apps. The experience is seamless, from shopping to paying. There are no redirections or abnormal scaling of web pages. It needs a platform-specific implementation - Eg. iOS, Android, Web, etc.
2. Embedded Checkout: This method accomplishes payment using an iframe or widget within your app or website. The user is still on your site. The experience won’t be as smooth as a Native Checkout, but it is usually better than a redirection flow. The experience gets compromised when there is 2-factor authentication with non-uniform page scaling.
3. Redirected Checkout: The user is redirected to the payment processor’s page. While it is easy to implement, it doesn’t offer a unified payment experience.

Now, let’s take a look at designing a Checkout Page that Converts!

Designing the Checkout Page

We discussed a few issues which hamper the checkout experience for your customers. Unexpected charges, complex checkout processes, performance issues, errors, and crashes, Payment method coverage pose a great problem to be solved. While all of these will impact the checkout experience, some have a greater impact than others.
Let’s take a look at the best practices that you can follow for creating efficient, effective, and simple checkout experiences.
1. Have multiple Payment Methods: Start with understanding how are your customers buying? What Payment Method they use the most? Which Payment method(s) are popular among your customer demographics? Answers to these questions will lead you to a giant list of all the Payment Methods you should support. The more payment options customers have, the more likely they are to complete the purchase.

2. Prioritise a mobile-friendly design: Over half of all ecommerce purchases happen on a mobile device. When designing your checkout for conversions, you need to deliver a simple and seamless mobile-friendly design, which is uniform across all device types.
Design your Payment Page

3. Signal Security and Trust: The anxiety you feel at the cashier while counting change also manifests itself in an unusual way while we’re paying online as well. You need to signal security and trust to help customers gain confidence in your online store or platform. If customers do not feel their financial and personal information is safe, they are likely to abandon their cart.

4. Simplify: Simple is better. A simple and easy checkout experience is more appealing to customers. Payments involve handling of sensitive data and hence, the design needs to be convenient, clear, and accessible to your customers. Unnecessary steps, collecting irrelevant information, or a poor layout can affect your conversion. Design for simplicity.

5. Accessibility: Customer can make errors while entering their UPI ID or their card info**.** Your checkout experience needs to solve for human errors. Data Validation and notifications for input errors reduce such errors during checkout and help customers enter accurate details.

6. Seamless: Customers are taken aback when the checkout page is an alien experience compared to their browsing experience on your online store or platform. The Design and Brand Consistency should seamless flow into the Checkout Design as well. If not done well, customers might feel disengaged and drop-off. Everything from the layout and order to the colours, icons and fonts should feel like a coherent brand experience.

7. Rinse & Repeat: The Checkout Design is not a once-and-done setup, and requires consistent iterations to achieve the best results. Test, measure, and refine to achieve a checkout experience that your customers love.

Layer 2: The Back-end Payment Processing Layer

With the Checkout Design, you simplify the Payments Experience for your customers. The next layer in your Payments Stack is the Back-end.
The back-end determines your payment conversion rates and overall processing cost. An effective and efficient Back-end is how you ensure your customers never see the “Payment Failed” screen.
Let’s dive into how optimising the back-end can translate to improved conversions for you.

1. Payment Gateways / Aggregators: This is the most crucial dimension to keep in control. Most businesses start with one gateway, whichever is easy-to-integrate and fulfils the basic use case of online payment collection. However, as your business grows, you need to bring in more aggregators to address your growing payment needs - new payment methods, new markets, new currencies, etc. And as your Payments Stack incorporates additional PGs, ensuring that they work in unison becomes a challenge.
2. Payment Routing: Payment Routing or Orchestration involves routing transactions among different Payment Gateways(Razorpay, PayTM, PayU, etc.) or Processors(Stripe, Adyen, etc.) An effective Routing mechanism is essential to ensure that your customers’ transactions cross the finish line and hit your bank. Routing can help you maximise conversion and reduce payment processing costs.
3. Payment Flow: The Payment flow, although linear involves several touch points from start to finish. This includes decisions like when to (a) enable specialised offers, (b) present / block specific payment methods such as Cash on Delivery, and © reconciliation. Additionally, you want to ensure that your Payments Stack integrates seamlessly to your ERP, Accounting platforms, etc, which consume payments data.

Layer 3: The Payment Operations Layer

This is the Command Centre of your Payments Stack. It helps you manage the Front-end and the Back-end, and Payment flows like Refunds, Alerts, Reports, and Reconciliation. Payment Operations is also your window into measuring the performance of your Payments Stack.
Let’s look at the different elements of Payment Operations.

1. Core Analytics: Test, measure, and repeat is the mantra to success. And Payments are no different. Your Payments data is your window into your customers’ buying behaviour and the performance & reliability of your Payments Stack. Transaction Success Rates, Volumes, Refund Statistics, and the performance of your Payment Gateways are some of the most important metrics for you to refine your Payments Strategy.
2. Refunds: Refunds are co-existent with payments and digital refunds are tricky. Hence they need to be handled properly. It impacts your NPS, and any bad experience can bring in bad brand reputation to the market. Read how Juspay Payouts helped in reducing the refund timelines.
3. Alerts, Notifications & Reports: You should set alerts, notifications, and scheduled reports for timely action.
4. Reconciliation: When there are multiple gateways, reconciliation becomes messy - and teams have to deal with different settlement timelines and multiple excel sheets to ensure everything is in order. Payment orchestrators like Juspay can be helpful in bringing all this data in one place and make it easier to reconcile all your payments through a single system
5. Data Insights & Recommendations: Your payments data has a lot of insights hidden beneath multiple layers. Choose the right payment partner which can help you present all insights and actionable recommendations in an easy to consume format.

Summing Up

As you construct, refine, and expand your business, it’s vital to have a reliable payments partner that understands the complexities and challenges of managing and scaling payments. Juspay emerges as the preferred payments platform for leading companies in India, fostering long-term partnerships right from their inception. With over a decade of expertise in building and managing payment stacks for notable businesses like Cred and Amazon, Juspay ensures seamless harmony among all layers of your payments infrastructure. This harmonious integration drives revenue growth for your business while delivering frictionless experiences for your customers.
At Juspay we offer an end-to-end, future-proof infrastructure that directly connects with 300+ payment gateways, renowned networks such as Visa, Mastercard, and NPCI, and the preferred payment methods of your customer base. Our innovative products have revolutionized the payment experience, transforming it into a potent growth lever for your business. As an integral part of India’s remarkable growth story, we are committed to making payments effortless for the vibrant startup ecosystem and the billion-strong population.

Are you ready to take your business to new heights? Discover how Juspay can supercharge your growth trajectory and unleash its full potential.