Business friction has destroyed more than one successful enterprise, but this doesn’t have to be the case for you. Learn how you can keep things running smoothly while continually attracting more customers.
Whether online or offline, at the storefront or on the internet, business friction can make or break your business.
A 2018 study conducted by Facebook IQ and BCG determined that friction cost businesses in Asia Pacific more than US$320 billion in lost revenue. And to put that into context, Singapore had a GDP of US$340 billion in the year 2020.
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It’s clear to see that business friction is a huge opportunity loss for any merchant — from sophisticated MNCs to micro-enterprises.
But the question is…
What is Business Friction?
Business friction refers to factors that prevent or slow down customers from purchasing your goods and services. Not only does it cause an organization to lose out on sales, but it can also cost long-term customers and damage the merchant's reputation.
Thus, it's imperative to identify and reduce payment friction where possible. But to do so, we must first take a look at…
5 Examples of Business Friction
1. Lack of Support For Favored Payment Methods
The COVID pandemic has shifted consumer expectations worldwide and increased demand for alternative payment methods or APMs. From a desire for zero-contact payment to the increased usage of e-wallets, a business must cater to the changing needs of their customers.
E-wallets and instant bank transfers are especially popular, and it's easy to see why. Users only have to scan or display a QR code from their mobile device to pay for their purchases. There's no need to reach for a payment card or provide a PIN code to the cashier.
All of which make alternative payment methods safer and significantly quicker. Hence, it's easy to see why they've taken off in such a big way across Asia Pacific.
Supporting APMs allows merchants to provide their customers with more payment channels to complete their transactions. This makes it easier for customers to pay for their purchases and provides them with a positive shopping experience.
This is why it's also essential to make sure you don't have an:
2. Overly Complicated Checkout Processes
Studies show that 80% of customers will abandon an in-store purchase if the queue is too long. The same also applies to e-commerce businesses with poorly-designed checkout pages.
Customers have little time for complicated payment processes and long queues in today's fast-paced world. A non-intuitive payment system only frustrates and confuses customers, leading to cart abandonment and lost sales.
Hence this is why it's so crucial for merchants to optimize their payment processes for less friction. Removing all of the hurdles between discovery and completion minimizes the risk of customers abandoning their purchase at the last minute.
To do so, design your checkout page to guide customers from one step to the other. And if your business caters to an international audience, ensure that you support all manner of localized payment methods.
Besides supporting your customer's favorite payment methods and keeping the checkout process smooth, look out for:
3. Poor Customer Service
According to a 2021 study by the Qualtrics XM Institute, 53% of customers reported that they would stop all business with a brand after a single bad experience.
Besides that, poor customer service is also a major cause of business friction. Dissatisfied customers cannot be converted into sales and may lead to a loss of repeat business.
This is why it's so important to ensure that customers are well-treated. It satisfies them and encourages customers to act as unofficial ambassadors for your brand. Along the way, this builds up brand loyalty and solidifies your business's reputation.
When communicating with customers, always be prompt and polite in all your responses. This conveys a positive image, but it also creates confidence in customers, which goes a long way toward reducing business friction.
The same also applies when it comes to accepting payments from customers. Ensuring that your payment methods are localized and compatible with your target market goes a long way toward creating a great shopping experience.
Even if a customer fails to complete the sale, a positive experience with your brand gives them an incentive to return the next time.
The above are essential to reducing business friction, but it's also important to keep customers informed. So, avoid giving customers a:
4. A Lack of Information
Failing to provide customers with sufficient information is another major contributor to business friction. A lack of adequate information creates distrust in customers and discourages them from doing business with you. This is especially important during the discovery stage, where customers are just learning about your offerings.
Ideally, you want to ensure that customers have everything they need to know about your business. From products and services to accepted payment methods, take steps to showcase all of the advantages of your organization. Given how saturated the markets are nowadays, failing to communicate with customers is as good as shutting down.
So, as we've seen thus far, friction is something that all merchants need to think about. And this is where XanPay comes into the picture.
The XanPay Advantage
1. Supports Localization
XanPay supports the most popular alternative payment methods used across the Asia Pacific region. In fact, XanPay has helped businesses like Elitedias and Asia Vape tap into new and exciting markets across APAC.
By making use of XanPay, merchants can support alternative payment methods in the following countries:
2. Easily Integrated With Online Storefronts
Besides supporting APMs throughout Asia Pacific, XanPay is easily integrated with a variety of storefront plugins like:
3. Low Fees and Competitive FX Rates
XanPay does not charge any fixed fees. Instead, the platform utilizes a pay-as-you-go system and offers competitive FX rates and low domestic transaction fees. As an added plus, adult business merchants won't have to worry about chargebacks because XanPay has a no-chargeback policy.
4. No Cross-Border Complexities
Thanks to the freedom offered by the internet, merchants now have the opportunity to break into international markets. And with XanPay, businesses will have no trouble accepting payments from customers all over Asia Pacific. All without worrying about setting up local entities or any troublesome paperwork.
Smoothen Out Business Friction and Improve Sales with XanPay
Unfortunately, friction is unavoidable in conducting business, but it is perfectly manageable with the right tools. With XanPay, merchants now have the freedom to support a broader range of payment methods while still reducing transactional complexities.
For more information on how XanPay can transform your business, please visit our website here.