Believe it or not, making a payment may be the most emotional thing you experience all day. 

Saving up for a deposit on a house, finally buying your dream car, even shopping for groceries or paying a fine – all payments are an emotionally charged experience. Sure, we’re always conscious of the impact payments have on our bank accounts, but we don’t often stop to think about how payments really impact our mood. 

These emotions may not be linked solely to the moment of purchase; they may begin long before the payment is due or linger long after the payment is completed. Understanding this effect is essential for businesses striving to engage their customers in order to boost conversion – especially as the cost of living continues to bite.

What makes payments ‘emotional’?

Predictability of payment, payment type, the ‘friction’ of the payment and frequency of the payment all play a part in how emotional a payment might be. Friction refers to the obstacles or hurdles within the payment process that can either slow down the exchange – or worse, discourage customers from completing their transactions. 

Friction can also be necessary, as certain levels of friction are essential to maintaining the security of a transaction, preventing fraudulent activity, and ensuring you, as a customer, receive the right item, at the right price, delivered to the right location. In these instances, friction is good for you as a business, and your customer. 

For example: a recurring subscription payment (eg. Netflix) is rarely accompanied by strong emotions due to the payment’s predictability and minimal friction. The consumer expects it, and it requires no effort on their part to complete. 

Now consider a sudden, expensive event that requires effort to finalise, like your car unexpectedly breaking down on the way to work. Not only is this inconvenient and stressful, but the cost of towing and repair contains more friction, as you have to review information and physically use a card or transfer money on the spot. 

Highly emotional payment events can also be positive and are often symbolic of a larger emotional experience, such as buying your first home or paying off long-standing debt. The act of completing a payment makes these moments ‘real’ from a consumer perspective – something that’s especially important for vendors to consider when it comes to high-value transactions. These payment events also benefit from necessary friction, whereby more input from the customer to complete the payment reassures them that the transaction was secure and successful. 

So that’s the basic psychology behind payments, but what can business owners do to mitigate the negative effect that some transactions bring to the table?

Countering friction and frustration

The friction of a payment experience impacts how both you and your customer feel after a completed payment. Often, this friction relates to the amount of information required from the customer or the complexity of the steps involved.

With so many methods of payment out there, we encounter different friction levels daily. Traditional methods like manual bank transfers typically introduce higher friction due to the task of submitting recipient details such as the BSB and account number, demanding more effort from the payer to complete the transaction. 

On the other hand, smoother payment methods such as digital wallets and automated payments that come out of a customer’s bank account aim to provide frictionless experiences, reducing the effort required from your customers to make their payments. In the case of account-to-account solution PayTo, its reduction in authentication processes while maintaining a high level of security makes it more frictionless, only requiring the customer to initiate the transaction.

A checkout process with unnecessary friction is frustrating for your customers, as it demands more time and energy to navigate, triggering negative emotions associated with certain payments. By ensuring you offer a streamlined checkout experience that incorporates low-friction payment methods and offers customers a choice in how they pay, you can reduce frustrations linked with challenging payments, helping to maintain good customer relations and securing conversions.

Why understanding ‘money moods’ is important

Reflecting on your business’ checkout experience is important, as a strong understanding of how making payments emotionally impacts your customers could be the key to boosting conversion rates. In our current economic state, many are grappling with the rising cost of living, and so in the case of difficult payments, ensuring these experiences are less emotionally taxing than they often are (ie. by minimising unnecessary friction and expanding payment options) can be the difference between an incomplete transaction and a triumphant conversion.

It’s normal for consumers to feel a range of emotions when dealing with significant payments. For businesses that provide products or services that are often needed in unanticipated situations, it’s vital to understand the emotions behind payments –especially if you’re in industries such as health services, repairs or trades. 

By recognising payments as emotionally charged experiences, you will be able to gauge your customers’ happiness with the checkout experience, and where you may need to improve. Whether that’s the relationship you and your staff build with customers, the payment options you provide, or even the overall shopping experience; embrace the need to change and find where you can turn that moment at the checkout into a positive experience. 

Andy Wiggan is chief product officer at GoCardless.