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Today’s shoppers want flexibility in how they pay. Here’s how to give them more options.
Many of today’s shoppers do most of their shopping online, and they use a diverse range of payment methods. To accommodate those various methods, businesses should provide customers with the flexibility to choose their preferred way to pay at checkout. The result may be fewer abandoned carts and more satisfied, repeat customers.
“If you don’t offer enough choices, sales can drop,” said Raviraj Hegde, senior vice president of growth at DonorBox. “Customers expect flexibility, and if they can’t use their preferred method, they might leave.”
Fortunately, it’s easier than ever to add multiple payment options to an e-commerce website. Read on to learn which options you should consider for your business.
There are a lot of payment methods available today, and it’s important to offer the ones your customers like to use the most. Otherwise your business could be negatively impacted.
“A lack of diverse payment options can lead to cart abandonment, especially if customers don’t see their preferred method,” said Victor Julio Coupé, partnerships manager at Digital Web Solutions. “For instance, younger shoppers often rely on digital wallets, while international buyers might prefer local options like Alipay or Klarna.”
Consumers view debit and credit card payment options as a necessity in the online shopping space due to their ubiquity and convenience. Cards such as Visa and Mastercard are the most popular, but it is also worth considering American Express and Discover.
Third-party digital wallets, such as Google Pay and Apple Pay, continue to gain traction. Digital wallets provide an extra step of security, since users don’t need to directly share their financial information on the internet.
Bank transfers and direct debits allow customers to send their funds directly from their account to your business’s bank account. A common EFT solution is the Intuit Payment Network, which can be set up as an e-commerce button on your website. Since this type of payment is most popular in Europe and Asia, it can be particularly beneficial for businesses with an international customer base.
This payment option allows you to branch out to different platforms, including social media. Customers can shop and pay simply by scanning the code or clicking the link without having to directly visit or navigate your website.
Online stores can use this buy-now-and-pay-later method for promotions and sales events, and may be able to sell more inventory thanks to easy financing terms. Third-party services such as Afterpay and Klarna offer zero-interest financing on e-commerce purchases and are easy to add to a checkout screen by way of API integration.
Although there is still uncertainty about the long-term price stability of cryptocurrency, it is one of the cheapest and fastest ways to transfer payments around the globe. Implementing bitcoin on your e-commerce website could attract younger, tech-savvy customers and international customers with fewer easy ways of paying.
“Cryptocurrency payments, in particular, can become another serious driver of conversion rates,” said Vitaliy Shtyrkin, chief product officer at B2BINPAY. “Not only do they offer reduced transaction fees compared to traditional fiat methods, but they can also further incentivize customers by bringing down the price of a product when purchasing with crypto.”
E-commerce payment options beyond simply entering a debit or credit card number are useful — and increasingly expected. Making sure your customers have multiple easy ways to pay is imperative for e-commerce businesses.
“Payment options are a very critical part of the checkout process in any e-commerce setup,” Hegde said. “These work by connecting the customers’ preferred payment methods to your platform for quick and seamless transactions.”
The result is an improved customer experience, which can pay off for your business in the following ways:
Not all payment methods are created equally, so you should tailor your options to both your business needs and your customer base.
“Add payment options when you notice a trend in customer preferences and feedback that indicate a lack of certain options,” Hegde said, noting that entrepreneurs should avoid adding options that won’t actually be used by many customers. “Pay attention to the things that align best with your customers’ habits and needs.”
Consider the factors below when selecting payment methods.
Some payment methods may be underused or challenging to integrate, making them not worth the hassle. Be sure to analyze whether you actually need to add a payment method before going through the effort to do so.
“It is also crucial to maintain transparent communication, notifying your customers about new payment methods and their terms of use once they become available,” Shtyrkin said. “Businesses should use all available marketing channels to reach out to both existing clients and potential newcomers.”
Moreover, all payment methods need to adhere to regulatory compliance considerations, which include aspects such as security standards. Do your due diligence to make sure any payment methods you add aren’t opening up your business to legal liability.
Alexandra Tachalova and Jacob Bierer-Nielsen contributed to this article.