E-commerce is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the internet. Let’s focus on the middle portion of that definition: transmitting of funds or data, over an electronic network. When business owners think about selling goods or services online, one of the first questions to ask is, “What payment should I accept?”
Nowadays, a credit or debit card simply doesn’t cut it. With multiple payment options coming out such as Apple Pay, Google Pay, PayPal, and Bitcoin, business owners need to be flexible in exploring additional payment options. Customer convenience and satisfaction should be a business owner’s top priority, and how the business handles and processes payments not only affects the customer’s experience but the business’ overall success.
3 Key Benefits to Adding New Payment Options in 2022
There are many benefits around incorporating additional payment options on an eCommerce site. The top benefits are secure and easy electronic transactions, for both the customer and business owner. What do Apple Pay, Google Pay, PayPal, and Bitcoin all have in common? Three words: Encryption, Request, and Fulfillment. These words should be music to a business owner’s ears. With the additional payment options listed above, any eCommerce site will have secure transactions between the company and the customer.
- Encryption: Using a payment gateway, the financial transaction will be exclusive between the seller and buyer by using encrypted financial data between the user’s browser and the company’s server.
- Request: The credit card company or financial institution in use will receive an authorization request to proceed with the transaction.
- Fulfillment: Once the payment gateway receives the authorization, it will allow the server and webpage to proceed with the purchase. Using a secure payment method will help clients build trust with a company’s website. With financial data breaches on the rise, companies should look at gateways that are trustworthy and legitimate to provide a safe checkout experience.
Flexible Payment Options
Fun Fact of the day: The average global shopping cart abandonment rate for retail is 72.8%, and 73% of shoppers will leave a poorly designed website for that one that makes purchasing a product or service easier.
By offering multiple payment methods on an eCommerce site, a business owner gives their business more opportunities to gain sales and will take out the hesitation of making a product purchase. In addition to multiple payment options, consider flexible payment options, such as Klarna or Afterpay. When individuals are making larger purchases, flexible payment options can be the differentiator between a low or high cart abandonment rate. 30% of shoppers stated that a flexible payment plan option meant the difference between making a purchase or forgoing it. Being able to purchase a product without having to immediately pay in full will also help increase conversion rates for companies.
Consumers are more likely to purchase a product if they can pay for it in installments. Afterpay has found that conversion rates increase between 20 to 30 percent for retailers that offer some type of flexible payment service. Paypal offers “Pay In 4”, which allows a buyer to pay over time, but it limits the payments to four installments collected every two weeks. Another perk? It’s also interest-free. By offering options ranging from payments to flexibility around payments, companies can attract a wider audience spanning generations and demographics.
Know Your Company’s Demographics
Studies show that Millennials and Gen Z prefer alternative payment methods such as mobile payments and flexible payment options, while Gen X still likes to use the traditional method of credit or debit cards. PayPal revealed that 32%of millennials use its services, and 25%of millennials prefer to use it over other options for sending and receiving money.
Furthermore, 67%of millennials and 56%of Gen X spenders prefer to buy on eCommerce sites rather than in stores. A perk with PayPal is the company accepts Visa, MasterCard, Discover, and American Express credit card payments as well as bank transfers. One item companies should note around demographics: while Gen Z and Millennials do prefer mobile payments, don’t forget about the aging population. For those that are older and/or in a higher income bracket, many use the American Express credit card. Many small retailers tend to shy away from American Express, but including this as a payment option may help this demographic feel comfortable purchasing from your company.
Paying with a standard debit or credit card should always be a payment option, and nowadays it’s an expected option. In addition to payment options, companies should also include delivery options, and work with a vendor that will help deliver products on time. Companies using Deliverr use fast fulfillment to accelerate their sales. Between great delivery and payment options (and a great product!), any eCommerce site should thrive. Need help calculating your company’s fulfillment costs? Check out our post here!
An Extra Note on Apple Pay and Bitcoin
Another payment method worth calling out is Apple Pay. With 383 million iPhones worldwide, and an estimated 43% of all iPhones users utilizing Apple Pay, companies would be foolish not to add this payment option to their eCommerce site. In addition to Apple, Google and Samsung offer payment options through their devices, as well. In addition to iPhones, Androids also can link payment methods to most credit and debit card providers.
Last but not least, since we are talking about so much technology and integration, let’s chat about Bitcoin. Bitcoin started being talked about a few years ago and has been getting increasingly popular – an NFL football player is currently getting paid in Bitcoin! While there is still uncertainty about it compared to the payment methods being spoken about above, companies should consider Bitcoin’s future state. Bitcoin transactions use one of the cheapest and fastest ways to transfer payments globally. If a company implements Bitcoin on their platform, they may attract a new clientele – those that are dedicated to the Bitcoin movement as well as those that are tech-savvy.
Multiple payment options that are secure and flexible are the only way to go in 2021.
eCommerce sites are only going to gain steam, and every company should be fully equipped to handle their customer base. The holidays will be here before we know it…if you’re not sure how to start prepping your business, check out our post here!