The pros and cons of hosted checkout for recurring payments

~ 4 min read | January 4
Hosted Checkout Page

Depending on the payment gateway you choose, your business can have a customized checkout page or use a standard one provided by the gateway. Regardless of the checkout page you opt for, you will have to contend with the challenge of cart abandonment during checkout.

According to a report by Forrester, about 89% of consumers have abandoned a shopping cart at least once. As more people get comfortable with shopping online, businesses need to carefully tailor their checkout pages to offer a good experience and encourage completion of the buying process. Let’s look at the pros and cons of using custom and standard hosted checkout pages.

Advantages of using Customizable Hosted Checkout

a)  Easy Setup

For companies looking to start selling immediately, hosted checkout pages shorten the setup time required to start accepting orders online. Most payment gateways have standard checkout pages that consumers have come to trust over time. This eliminates the friction to purchase that a buyer may have.

In some instances, businesses simply need to copy and paste a line of code to start accepting payments. Startups with no technical expertise in their teams will find hosted checkout options a quick way to getting started.

b)  Higher Brand Awareness

The customer’s purchase decision, whether online or offline, is an emotional decision. Customers buy because they trust a merchant and believe the product/service will solve their problems more efficiently. When designing the elements on the shopping cart page, it is important to cultivate trust among users.

With a customizable checkout page, you can edit the CSS and HTML to match the overall theme of your website and brand colors. A branded checkout page makes users more comfortable with completing the purchase process.

c)  Have Call-to-action (CTA) Messages

In the study by Forester, 13% of users indicated that they abandoned the checkout process because they were “not ready to purchase”. Consumers may not be ready to purchase because they are just browsing or want to compare prices.

You can increase the conversions by having clear call-to-action (CTA) messages on the checkout pages. Your CTA should be tied to your overall objective. For example, you can have a CTA promising free shipping for orders made “today”. Checkout pages’ CTAs can have an impact on users that are not yet ready to buy, and improve your sales.

Disadvantages of Hosted Checkout

a)  Lower Conversion Rate

Hosted checkout pages can reduce the time required to start accepting orders online. However, they can also affect the conversion rate. This is especially true if the pages cannot be customized.

Businesses that use standard hosted checkout pages may see lower conversions especially among buyers that are brand conscious. Buyers may be wary of completing checkout when they realize they are directed to a page that is different from the website where they have been shopping.

b)  Inability to Split-Test

To find optimal conversions, it is crucial to test the checkout page with different elements and design. This will help you to know what is working and hence tailor the website to improve conversions. Unfortunately, with hosted checkout pages, you cannot split test your pages. Since the pages are in control of the payment gateway, you cannot set your website to deploy different pages to different users and track their actions for optimization.

c)  Limited Options

Hosted checkout pages come with the options set by the provider. You may not be able to add other options that may be crucial to improving conversions among your target users. Some of the information you may wish to have on the checkout page include current promotions and discounts, multiple shipping and payment methods, specific information that may be relevant to the product or your market (e.g. date of birth, phone number, etc.), and so on.

Hosted checkout pages make it easy for businesses to start accepting orders online. However, they can also limit conversions especially if they cannot be customized. Before choosing a subscription payment provider, ensure that you will be able to customize the checkout pages.

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John Solomon

Marketing Leader / Sales Enabler. Head of India Operations for @Infrascale / @sosonlinebackup.