We recently ran an experiment to help businesses answer one of their most commonly asked questions: how does adding payment methods to the checkout experience affect conversion and revenue? 

It’s an important question and one, thanks to Stripe’s scale, that we’re in a good position to answer. Last year we processed $1.4 trillion in transaction volume—equal to around 1.3% of global GDP—which allows us to detect trends and run control experiments that wouldn’t be possible otherwise. In this case, we ran a statistically significant holdback experiment within our Optimized Checkout Suite to measure the conversion and revenue impact of more than 50 eligible payment methods. 

The results show that when at least one additional relevant payment method beyond cards was dynamically surfaced in the checkout, businesses on average saw a meaningful increase in conversion and revenue. In particular, businesses saw the biggest uplift when offering dominant local payment methods, digital wallets, and bank debits.

We also segmented our results by country and industry, allowing us to understand how the conversion impact of adding payment methods changes depending on where in the world a customer is located, and what that customer is buying. Overall, our findings underscore the benefits for businesses of tailoring payment methods to the unique features of each transaction.

Businesses offering local payment methods increased conversion and revenue

We first wanted to understand the impact of payment methods across all businesses on Stripe, regardless of location or industry. We found that in aggregate, when at least one additional relevant payment method beyond cards was dynamically surfaced, businesses on average saw a 12% increase in revenue and a 7.4% increase in conversion rate. In other words, the greater the number of relevant payment methods displayed to a customer, the more likely they were to complete a purchase.

To give businesses more granular insights, we analyzed the impact of payment methods based on where customers are located and in which industry a business operates. We found that under specific conditions, adding the right additional payment had a significant effect on conversion. Here are averages across several different combinations of payment methods, geography, and industry:

• 91% increase in conversion when businesses offered Alipay to customers in China
• 46% increase in conversion when businesses offered BLIK to customers in Poland
• 39% increase in conversion when businesses offered iDEAL to customers in the Netherlands
• 27% increase in conversion for businesses that sold digital apps and offered Konbini to customers in Japan
• 47% increase in conversion for businesses that sold digital books, music, and movies and offered PayPal to customers in Germany 
• 5% increase in conversion for businesses that sold digital games and offered Cash App to customers in the US

These findings reflect the variety—and popularity—of payment method preferences around the world. For example, BLIK accounts for 70% of ecommerce in Poland, while Alipay and WeChat Pay account for 90% of all mobile payments in China. These high adoption rates explain why businesses can see such large increases in conversion rates, highlighting the need to offer country-dominant payment methods as businesses expand globally.

Digital wallets were among the highest performing payment methods

When analyzing the conversion impact of the payment methods in our experiment, one payment method family stood out: digital wallets. Among eligible checkouts, global businesses that offered Apple Pay saw an average 22.3% increase in conversion and 22.5% boost in revenue; businesses that offered WeChat Pay saw an average 13% increase in conversion and 14% increase in revenue; and businesses that offered Revolut Pay saw an average 3% increase in conversion and 13% increase in revenue. 

This trend illustrates the evolving landscape of payment methods. Customers are becoming more discerning and expect a seamless, one-click checkout experience like the one that digital wallets provide.

Bank debits resulted in net-new sales without reducing conversion

Businesses tell us that they are interested in offering lower-cost payment methods such as bank debits, but they worry about introducing friction to the checkout experience by requiring customers to log in to their bank or manually enter their banking information.

Our data suggests that for some businesses, bank debits don’t impact conversion, and in some cases, they actually increase it. We found that, on average, ACH Direct Debit in the US and pre-authorized debits in Canada have a neutral impact on conversion, and that SEPA Direct Debit increases conversion by 12% when used by customers in the European Union. 

In addition, some bank debits result in net-new sales. On average, offering ACH Direct Debit in the US and offering Bacs Direct Debit in the UK each result in 100% incrementality, meaning they bring in brand new payment volume rather than diverting existing card transactions. This indicates that bank debits appeal to a different audience, and that offering them can help businesses broaden their customer base while reducing overall payment costs.

Grow your business with the Optimized Checkout Suite

In addition to sharing concrete data to inform your payment strategy, we continue to expand our support for payment methods. The Optimized Checkout Suite provides more than 40 payment methods through a single integration, and we recently launched a no-code payment method A/B testing tool that allows businesses to run their own experiments (and validate any experimental results we share). In addition, the AI models built into the Optimized Checkout Suite handle the logic for dynamically displaying eligible payment methods for each transaction—removing the need to know and encode specific eligibility requirements. 

To learn more about payment methods or to get access to Stripe’s Optimized Checkout Suite, read our docs or get in touch with an expert from our team.