Ecommerce and financial technology continue to grow, giving customers more payment methods to choose from than ever before. As a business owner, you may prefer to stick to more traditional options, like credit and debit cards. After all, these methods have proven security measures and just about everyone has at least one.
While this is a tempting line of thinking, it can also be detrimental to your business growth. Many shoppers now use and prefer direct bank transfers, digital wallets, and BNPL (buy now, pay later) options. Here’s what you risk if you fail to meet this demand – and what you stand to earn.
The Main Types of Payment Methods
With more and more payment options hitting the market, it can be hard to keep track of all the different ways that your customers may want to pay. Luckily, payment methods typically fall into a few key categories:
- Cash and checks
- Global debit and credit cards (like Mastercard, Discover, and Visa)
- Local debit cards (like UnionPay in China)
- Digital wallets (like Apple Pay, Venmo, and PayPal)
- Cryptocurrencies (like Ethereum and Bitcoin)
- Buy now, pay later schemes (like Klarna and Affirm)
It’s easy to see why you might get overwhelmed with the sheer number of payment methods and choose to accept just one or two. While this can work to some degree, it can also make it impossible to reach certain customers and grow your business.
The Benefits of Offering Multiple Payment Methods
As more people shop online and ecommerce continues to grow, security also becomes an increasing concern. Data breaches are more common than ever, and that creates issues for shoppers and businesses alike. While credit and debit cards are very secure, newer payment methods also have impressive security measures that can help protect sensitive information.
Security varies between APMs (alternative payment methods), but each has its own way of protecting information. For example, Apple Pay and Google Pay each use encryption to protect card information and transaction data. Neither store customer card numbers on their servers, so there’s nothing there for hackers to steal. Plus, the user must authorize each transaction with FaceID, TouchID, or a numerical code.
Similarly, PayPal uses end-to-end encryption so that each transaction occurs on secure internet servers. It also has two-factor authentication, which helps confirm that the person making the purchase is a legitimate customer.
These measures safeguard customer information and protect your business from theft and chargeback fees. The safer customers feel making a purchase, the more likely they are to shop with you.
Lower Cart Abandonment
Data from the Baymard Institute shows that there’s an average cart abandonment rate of nearly 70%. That means that just 30% of people who put something in their cart will actually complete their purchase. People abandon their cart for many reasons, some of which are outside of your control.
However, 9% of people report abandoning a purchase because there weren’t enough payment methods. You can easily correct this issue and boost sales significantly by accepting more payment methods. Plus, 4% of people said they abandoned their cart because the system declined their card. They may have been able to proceed if the merchant offered more payment methods.
Improve Customer Experience
Every customer has a different preferred payment method for different reasons. They may prefer the points they receive from using their credit card, the security of PayPal, or the convenience of Google Pay. No matter what they prefer, you need to be able to meet customers wherever they’re at.
When you accept more payment methods, you create a positive checkout experience for more customers. People appreciate the convenience, affordability, and security that different payment methods offer. When your business accepts their preferred option, you’re more likely to earn their loyalty.
Plus, alternative payments are popular – 51% of Americans now use a form of contactless payment, like mobile wallets. There are 507 million global Apple Pay users. That’s a huge market you can tap into and connect with just by simply accepting their payment method of choice.
Keep Up with the Competition
As we’ve discussed above, customers are now coming to expect you to accept more payment methods. In fact, research from PPRO shows that a whopping 42% of US shoppers say they won’t go through with a purchase if they can’t use their preferred payment method.
If you don’t offer a customer’s preferred payment method, another merchant will. It’s easy for them to move on to the next brand and buy from them with just a few taps on their phone. In order for your business to remain competitive, you need to accept a variety of payment methods.
Earn More of the Mobile Commerce Market
People no longer do the majority of their online shopping from their computers – instead, they’re shopping from their mobile phones. According to the Pew Research Center, 91% of Americans ages 18 to 49 day that they shop and purchase items on their smartphones.
If you want to capture sales in the m-commerce (mobile commerce) market, you need to make sure your website is extremely mobile-friendly – including your payment methods.
Digital wallets are often built with mobile purchases in mind, making it extremely easy for users to authorize a purchase with a single tap. By accepting more of these payment methods, you can earn more sales.
Reduce Dependency on Individual Payment Providers
It can be tempting to accept a select few payment methods or providers. This approach keeps things simple and allows you to focus on other important elements of your business. However, it also leaves you dependent on one or two payment providers. If those companies run into any issues, your business is at risk.
By offering more payment methods, you avoid this situation entirely. If one payment method experiences issues, your customers have the option to select another rather than giving up on the purchase.
How to Choose the Right Payment Methods for Your Business
The right payment methods can vary from business to business. However, every payment method you accept should meet the following basic criteria:
- Simplicity: One of the top reasons customers abandon a sale is because of a complicated checkout process. The faster a customer can select a payment method and approve the purchase, the better.
- Security: Security is a top concern for your business and for shoppers. Choose payment methods that have security measures in place, like tokenization and encryption. This will help your business avoid fraudulent purchases and chargeback fees.
- Affordability: Some payment methods are more expensive than others, charging higher-than-average fees. Consider whether a payment method’s fees are affordable before accepting it.
- Reliability: Just about every payment method comes with the potential to experience issues or downtime. This is especially true for newer payment methods, as the more popular options have had time in business to work through any issues. Check whether a payment method has a history of downtime before offering it.
Aside from the above points, it’s also important to consider your target market. What do they prefer to use? For example, if your target market only uses iPhones rather than Androids, you likely only need to accept Apple Pay and not Samsung Pay. However, if you want to expand, you might accept both to avoid alienating part of your audience.
Why Choose Pay.com as Your Payment Service Provider?
When you’re ready to start accepting more payment methods, Pay.com can help. Adding more payment options to your website or invoices is easy. In fact, all you have to do is click a button to start accepting each payment method. You can choose from all the major options, including credit and debit cards, ACH transfers, Apple Pay, Google Pay, PayPal, and more.
Pay.com provides you with a powerful payment solution. You can start by setting up a customizable checkout page with our no-code solution. Or, use our developer-friendly APIs to add hosted payment fields to your website or app. We also provide top-level security measures, including Level 1 PCI DSS compliance and tokenization, so your transactions are always safe.
You might worry that switching payment service providers and accepting more payment methods will be expensive. Pay.com has an affordable, per-transaction flat fee structure, and you can track fees on the Pay Dashboard so you never have a surprise bill.
The Pay Dashboard also provides you with in-depth insights and reports so that you stay up-to-date on all things payment related.
The Bottom Line: Your Business Can Easily Accept More Payment Methods
As ecommerce and mobile commerce grows, the world of payments will also change. It’s your job as a business owner to keep up and offer the payment methods that your customers prefer. Meanwhile, it’s also important to consider the security, simplicity, and reliability of each payment method before you start accepting it.
With that said, accepting more payment methods can be an easy way to grow your sales. If you can fulfill this demand, you can improve your customer experience, reduce lost sales, and come out ahead of the competition.