More Payment Options Mean More Sales for eCommerce Stores
eCommerce businesses have been rolling out more and more ways for consumers to make payments for their purchases. It seems that if it is easier for consumers to pay for their purchases online, then they will buy more from online retailers. It is in fact one of they key factors in making an eCommerce store successful as it leads to lower rates of abandoned carts, and higher sales.
A report by the US Commerce Department reported that online sales reached almost $305 billion with a growth rate of more than 15% during 2014. eCommerce growth has in turn generated a good amount of interest from the payments industry. The payment industry now offers more ways to pay online with increased security and options. The increased number and variety of payment methods has in turn helped generate more sales for eCommerce stores. Consumers can now use PayPal, Credit and Debit Cards, Gift Cards, Prepaid Cards, Virtual Cards, Android pay, Apple Pay, and Samsung Pay.
Credit and Debit cards have always been the favorite forms of payment for online shopping. But many customers feel hesitant handing over sensitive card data along with address info to online stores, especially since they have to give it out for all the online stores that they shop at. With new technology and with mobile gaining traction, alternative payment options have come into the market. eCommerce retailers can now offer Bitcoin, Amazon Payments, Gift Cards, Reloadable Prepaid Cards, eChecks, Google Checkout, Google Wallet and ACH among others. Online retailers have realized that more payment methods make it easier for their customers to shop with them.
Why should eCommerce businesses expand their payment options beyond credit and debit cards? How can they attract customers who prefer alternative payment methods for online shopping?
Fear of stolen card data:
Some customers fear that their card data may be stolen if they give it to online stores while shopping online. So, by offering other payment methods that do not require shoppers to give up their credit or debit card data, online retailers can still make a sale.
Some consumers do not have credit or debit:
According to Goldman Sachs’ “The Future of Finance” report, about 25% of the US population either does not have a bank account or have one but choose to use checks or cash for all purchases and payments. For eCommerce stores to capture this segment of the population, gift cards and reloadable prepaid cards could help. A survey by First Data found that 64% of the above segment of the population use reloadable prepaid cards to shop online.
Many consumers do not wish to provide their personal details to online stores. For such customers, Guest Checkout and Prepaid cards is a great combination. It enables them to shop online and make payments without having to “give up” all of their personally identifiable information. eCommerce stores with such features have a good chance of increasing their sales volume.
Lower processing costs for eCommerce retailers:
Online retailers gain customers by providing alternative payment options. It improves sales and also may lower payment processing costs for retailer merchant accounts. Some of the alternative payment options may have lower transaction fees than traditional debit and credit cards.
So, the main thing that online retailers need to do is to offer a variety of traditional and alternative payment methods. By having all (or most of) the available options, they can easily accommodate different types of shoppers. More payment methods mean more shoppers and that means more sales!