Why do checkout processes place payment info last?

Question

Most e-commerce sites that I go to have payment information as the last step of the checkout process. Some of these sites provide the option to save my payment info for quicker checkout in the future yet even with these sites, the payment information is the last step before submitting the order.

If my saved payment information is tied to a billing address and I ship to the same address; wouldn't it make more sense to have the payment information the first step in the checkout process and, if saved, have everything else filled in for me?

In some of the user tests that I've done for my clients, most users are similar to my own behavior billing and shipping being the same. I am wondering if anyone knows or has any data indicating why payment information seems to be last in almost every shopping cart checkout process out there. Having payment information first feels more appropriate; however, am curious to know if there's a negative reaction from such or if there's other rationale.

UPDATE

There are some great answers thus far. One thing that I'm attempting to look at is a traditional process which all the answers have been great thus far vs something like Amazon's one-click process where all payment, taxes, and delivery information is already setup and thus make an extremely steamlined processed for returning visitors. While I believe Amazon's one-click checkout process is still patented (or at least was ~10 yrs ago), are there things we can still learn from such?

UPDATE 2

Updated the phrasing of my question a bit. I meant asking for payment information first in the checkout process and then, if saved, fill in the billing/shipping information and such for the customer. I never meant asking for payment information prior to even product selection or customization.

Answer 1

I would expect payment information to be demanded only once I've been presented with the absolute grand total, so that I know exactly how much I'm going to be charged.

One of the common steps in a checkout process is choosing from delivery options, which often have different charges associated with them. Another example is gift wrapping, which usually incurs a charge.

It is really only appropriate to ask for payment details after all of these variables have been confirmed, which typically means it occurs at the end of the checkout process.

Answer 2

In addition to the (good) experience related reasons given in other answers - there's a technical one.

Asking for payment info early requires you to store it. This requires additional (costly) security requirements (ensuring the CC is stored safely, PCI certification, etc.). So adding the info early can significantly increase the implementation and running costs of the system.

Also some information cannot be asked early. For example the three number security code on the back of the card can only be asked for at the point of the transaction.

Answer 3

Payment entry (and certain other attributes) also usually incurs per-use charges. Though I argue that the overall benefit can be so high they need to ignore the pennies-per-transaction fees, it is the reason these systems were designed like this in the first place, and a key pressure today from the business, making it hard for us to modify the methods for more usable, user-friendly processes.

Though I have never gotten one implemented, the process of payment info up front seems easy if you consider using stored payment as a baseline. These systems know you have a payment method, and may even have you select it early in the (brief) checkout process, then show the total at the end as a confirmation. This covers all conditions like shipping method.

As an example benefit to payment up front is that sometimes broad acceptance of payment methods is a benefit, that the merchant is effectively hiding. Accepting Paypal, for example, may make some people (e.g. with large PP balances, languishing) willing to buy faster, or spend more today. Just putting icons in the footer or somewhere doesn't help as much as seeing the option, in general, so I expect (have not implemented so no data on this specifically) would help improve sales figures on several dimensions.

Answer 4

Asking for payment details in the last step has

Benefits for user and merchant:

User perspective

• knows total amount before entering sensitive payment data
• can review the order and then decide if he wants to pay or not

Merchant perspective

• knows whether it's a new or returning buyer
• has shipping address and can calculate shipping costs
• has email, IP, address, shopping cart details and can do risk assessment
• can offer payment method selection based on the above (i.e. risk)

Edit:

Regarding the updates of the original question

• the Amazon 1-click patent is granted in the US but not in Europe
• 1-click only works if you signed up for an Amazon account
• models like 1-click do not work for new/first time customers. For returning customers it works if they signed up for an account and if you saved their payment details. As @adrianh said in his answer the PCI requirement for storing payment information are very high and the certification process can take a lot of time.

Basically two questions you would need to answer for yourself

• is it worth the effort to implement payments in a way that you can store the information, given the effort is huge and
• do you want to force users to create an account on your site even though they might prefer to order 'as a guest'?

Answer 5

It seems the other answers have missed the obvious answer to this question: You don't want to take payment information until you know that the user actually has to give it.

A typical shopping website has many forms of payment, one of which is a credit/debit card, others are vouchers, discount points, gift cards, and so on. You don't want to take payment details until you have dealt with the other discount methods, because they might not need them if the discount covers the entire cost of the order.

Some discount methods might not cover shipping; either way you would like to know the "grand total" before applying a discount so you know how much discount you can apply. Following on, some shipping methods may only apply to certain products in your cart.

With these in mind, the following flow forms:

Cart -> Shipping information -> Vouchers/etc -> Payment details -> Review

A clever design may merge some of the above pages, but fundamentally if you rearrange any of the steps then you may end up asking a question to the user and ignoring the answer.

Answer 6

This is a great question with sensible answers so far, but think I it's important we continue to ask as e-commerce morphs more quickly.

Whenever I realize how much I despise this checkout process or that checkout process I counter that thought with the awesome things companies like Gumroad & Chirpify are doing. Minimalist in the first case (try it here : http illegal-art.net/girltalk/shop/) & genius use of PayPal's pre-auth in the second.

Those examples may seem impractical in the case of full-scale, traditional e-commerce at first glance, but try thinking about how to avoid handling the sensitive financial data at all if possible & taking the repeat authorization out of the process.

Answer 7

It mimics a real-world buying process.

Imagine you are buying a table in a furniture store.

You don't go picking you table, then pay, then selecting the paint color, and after that ask the sales assistend for shipment options.

Much rather you: First you look at models, pick and tell a sales assistant which color you want, they then write up the bill, ask how you want to have it delivered and lastly you go to the checkers and pay.

Answer 8

It is called the lock-in effect. They user spent so much time selecting the shopping cart items that he might feel compelled to complete the purchase because the "lock-in effect"; this supposedly maximizes the sales "funnel" throughput.