Continued success in the world of e-commerce requires constant effort to grow the reach of your brand. The payment method options that consumers have for checking out in your online store is one of the most important, yet often overlooked, aspects of making your website accessible to customers.
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. Online merchants can therefore capitalize on the growing momentum of e-commerce industry by offering alternative payment methods. This especially holds true in emerging markets, where not everyone has access to credit cards.
What is an alternative payment method?
Alternative payments refer to any payment method besides a credit card. If you have yet to embrace alternative payments, or are thinking of expanding your current options, here’s why more consumers are embracing alternative payment methods and what the benefits to your business are by offering them:
More payment methods encourage sales
Shopping carts often get abandoned because the final amount becomes too expensive for the consumer to pay at once. In a 2017 study by FuturePay, 72% of respondents mentioned that the reason they abandoned their cart was because the order became too expensive. The good news is that merchants can overcome this challenge by offering an alternative payment, usually in the form of consumer credit or financing. The customer is allowed to pay for the product over a specified time, instead of all at once, at a low or interest-free rate, and the merchant makes a sale of an item that would normally be discarded from the cart.
73% of daily online shoppers in the same survey mentioned they would be more likely to purchase an expensive item if financing options were available. So by offering a form of payment that allows customers to pay over a certain period of time will heighten your chances of gaining new customers and increase the amount that existing customers are likely to spend.
Alternative payment methods speed up checkout
Checking out can often become a source of frustration to online shoppers if the process requires them to enter numerous card details or personal information every time they checkout. As security of personal information still remains a fear for many customers, offering alternatives that don’t require the input of personal information during each checkout will significantly decrease the checkout time and offer a more customer-friendly experience.
According to Business Insider, 46.1% of cart abandonments happened at the payment stage and 37.4% happened at the checkout login stage. Merchants can tackle this challenge by offering alternatives that don’t require the entry of personal and card information, streamlining the process for the benefit of customer experience.
Many e-wallet and one-tap payment methods can resolve this issue, as well as credit products like LazyPay (available in India through PayU), that allow the consumer to pay now and enter their payment details later.
Alternative payments give customers more options
While this is an obvious benefit, it is an important one. As more and more consumers turn to online shopping, more will expect to see their preferred payment method offered. With more e-commerce options available than ever before, if your store doesn’t offer their payment choices they will easily switch to one that does.
Of the respondents in the FuturePay survey, 26% mentioned that not finding the payment option they were looking for was a concern. While offering credit card payments only sounds simple to you as the merchant, if you operate in various countries, you might be eliminating customers who have different local methods and preferences.
In the emerging markets which are the primary focus of PayU, a large percentage of the consumer population typically does not have access to a credit card. Despite this, consumers still want to engage in online shopping, but need additional payment methods such as cash, bank transfer and others to pay for their online purchases.