What is Checkout?

Checkout

n. The point in a customer’s journey where the account information and payment details are collected, the transaction is processed, and the product/service is purchased.

Checkout: The Most Critical Moment In Your Customer’s Journey

Checkout is essential for all kinds of transactions. From purchasing a product once to buying it on a subscription basis, checkout is absolutely necessary. Checkout in SaaS is the equivalent of having a checkout counter in a departmental store - from filling the cart with products you wish to buy, then paying for them using your credit card, and finally receiving a bill from the store. Except in SaaS, the whole process is carried out online.

SaaS businesses by nature need to automatically trigger transactions at the time of renewal. This requires a way to securely collect and store payment information, which will then be used to trigger charges depending on the renewal cycle - weekly, monthly or annual.

Typically, in a SaaS checkout flow, card information of the customer is collected and stored in a secure vault during Checkout, and a ‘token’ is generated in exchange. During the time of renewal, your billing system will use this token to trigger the transaction and process it using the information stored in the vault.

How does ‘Checkout’ affect conversions?

A typical acquisition funnel has 4 stages - Awareness, Interest, Desire and Action. Even assuming a company makes sure that the first three stages are well taken care of, the slightest friction during Checkout will result in customers dropping-off from the funnel. This could be due to any of the following:

  • A long checkout process with too many fields.
  • Lack of security and signs of assurance.
  • Limited number of payment options.
  • Hidden costs and additional charges.

Friction kills conversions. By customizing the checkout page, businesses can minimize friction and thereby increase conversions. Some ways to achieve this is by offering free trials (with or without credit card info), minimizing form fields and using auto-fills, providing multiple payment options, multiple currencies, encrypting payment information and establishing secure connections.

Additional Reads

More reads about optimizing checkout for increasing conversions and enabling a better user experience:

Increase your conversions by offering a smooth and secure checkout experience with Chargebee.