There was a time when the concept of online payments made people skeptical, but that’s far from the case today. Payments are central to eCommerce and now people don’t think twice before making an online payment.
However, with more concerns about entering payment credentials and the desire for convenience and speed, shoppers are looking more and more at the different payment options available.
A demand for more payment methods
The Baymard Institute found that payment issues are one of the top reasons why shoppers abandon their carts. They become discouraged by the lack of payment options or slow checkout.
As a result, providers are now offering alternative payment methods (APMs), which are basically any type of non-card payment methods.
Globally, there are many alternative payment methods, including bank transfers, digital wallets, e-invoices and cash-on-delivery. One of the drivers of APMs is the use of mobile phones, as entering card details is just not practical on a mobile phone.
Digital currencies
Most payment methods are still dependent upon traditional financial instruments like cash and credit, but there are payment services now focusing on cryptocurrencies for eCommerce payments. If you want to know how to sell Bitcoin, the simplest way is to turn it into hard cash through an exchange program.
The exchange acts as the middle-man and sells your crypto for you. You create an account and link your bank account to it so you can get your cash out with little hassle.
Larger retailers like Walmart, Starbucks, and Amazon now offer store point balances or gift cards, effectively creating their own currency.
Finding the payment mix that optimizes conversion rates
For merchants to get the right payment mix, they need an understanding of local payment preferences and end-user devices. Every market has a preferential means of payment. In highly banked markets like the U.S. and the U.K. credit cards are still preferred.
Consumers in parts of Europe prefer fund and debit transfers. In markets with low card penetration and low banking, such as Southeast Asia and India, merchants offer cash-on-delivery options.
Because of the diversity, those wanting to do business across borders have to utilize payment service providers that offer a range of options. Merchants must offer at least the top payment methods in a given market to maximize conversion rates.
Customer experience
Payment services are consistently working on making payments faster. However, when customers have to enter card details or be sent to an external interface to process bank fund transfers, it slows down the process.
If a customer does have an existing account with a payment provider, login credentials are still needed to authorize payment for first use. All the steps can make the checkout process a lengthy one.
Using digital wallets or mobile payments is making checkout faster as the user’s financial details are stored ahead of time and payment can be authorized with a swipe or a tap.
Security is a constant and growing concern for eCommerce stakeholders. On the one hand, merchants don’t want to have the risk of fraudulent transactions, but on the other hand, users don’t want their payments to be rejected due to suspected fraud when they’re legitimate. Fortunately, many services now have better fraud detection algorithms for protection.
Technologies and services evolve
Consumer behavior is changing and the technologies and services that support eCommerce need to change too as they affect how business is done.
Broader arrays of payment methods allow businesses to conduct business across borders and mobile payments and digital wallets are offering quicker transactions. Ecommerce stakeholders want to provide their customers with an overall experience that is satisfying, speedy and secure.
