Why Businesses Need Diverse Payment Options
The payments landscape is changing at a rapid rate, and it’s very important for merchants to adjust to local purchasing preferences if they seek to meet the changing needs of their domestic consumers or conduct business in different markets. While alternative payments aren’t a new feature, they’ve gained momentum over the past few years as more consumers turn to online shopping and expect to see their preferred payment method. Let’s begin with a simple question: what are alternative payment methods?
1. What are alternative payment methods?
Simply put, an “alternative payment method” refers to any form of payment that isn’t cash or a major credit/debit card scheme. Some of the most widely used alternative payment methods include mobile payments, bank transfers, prepaid cards, and digital wallets, but there are many other types of APM, including money orders and cryptocurrencies.
Alternative payment methods offer a way for consumers to purchase goods or services without traditional payment methods like cash or major credit cards (Visa, Mastercard). APMs include prepaid cards, e-wallets, bank transfers, and payment instalment options (i.e., buy now, pay later).
2. What are the benefits to customers?
First off, alternative payment methods provide customers with the convenience and choice they’re looking for. They enable people to pay in a way that suits them, so as a merchant, it’s especially important that you’re able to offer a broad range of payment options at the checkout point. That way, you can gain an edge on your competitors, who may only offer traditional forms of payment.
Moreover, the checkout process gets way easier, which ultimately reduces the cart abandonment rate. Depending on the merchant’s target market, in the world, there are different social, financial, and convenience factors that contribute to people’s payment preferences.
A great thing about APMs is that they are all different and offer clients various ways to pay. Some APMs function as cashless apps you have on your phone, others – like e-wallets. Put simply, customers want a payment experience that’s as frictionless as possible. By offering alternative payment methods, that’s what you’re providing.
Apart from convenience, security is a major factor governing the rise of alternate payment methods. With an increase in credit card frauds, some customers have become sceptical of sharing their credit card details for online transactions and may want to pay differently.
3. What are the benefits to your business?
When a consumer is faced by multiple eCommerce stores offering similar products, user experience becomes an increasingly important factor in their decision-making process. Therefore, having APMs at your checkout will entice customers who are looking for the types of payment they know and trust and give you an edge over your competitors.
Alternative payment methods can be extremely beneficial for companies that wish to enable seamless cross-border payments. While many countries will be well served by traditional credit cards, you may need to offer alternative payment methods to reach global customers, particularly those in emerging regions of the world.
Offering more options at the checkout will earn you a much larger customer base, the higher number of diverse payment options you offer, the broader consumer base you will appeal to. However, you need to be able to offer the latest in payment technology as your lack of choice may deter consumers.
Not to mention that cashless services became more prevalent among customers and retail shops due to the pandemic.
While credit cards still dominate the payments market in much of the world, APMs are on the rise. Companies need to cater to local purchasing preferences if they seek to meet the changing needs of their domestic consumers or conduct business in different markets. A company must develop or find the right payment partners with specific APMs popular in that country or region. Failing to integrate the right APMs may cause challenges to your businesses. Find out how we can help you by contacting us via email firstname.lastname@example.org