Suffering From an Electronic Payment Solutions Overload? This should Help!
New payment methods are constantly being introduced in the payments industry. However, there is uncertainty over the longevity of newer electronic payment solutions. On top of it, there is the issue of regional preferences. While one electronic payment solution may work great for one demographic, industry or product type, it may not be appropriate for another. So what should you do – “wait and watch” or go for early adoption?
Mobile Payments
As an ideal payment mode, digital wallets used in mobile payments allow purchasers to make payments with a mobile device they always carry with them. Android Pay, Apple Pay, and Samsung Pay are the leading players. Several big retail houses plan to launch their own mobile apps, after seeing the success of Starbucks that gifted consumers with its closed-loop mobile wallets.
Pros
- No need to carry around leather wallets, with cash and credit cards.
- No need to re-enter details after initial registration.
- Quick payment transactions via a smartphone.
- Easy access to transaction history
- Easy to integrate with reward and points programs to inspire brand loyalty and attract customers
- Use of tokenization makes mobile payments more secure as sensitive data is not shared with merchants.
Cons
However, there are some limitations for as well.
- Users lack confidence that digital wallets are any improvement over traditional payment methods.
- Limited use, since digital wallets can be deployed only on specific devices.
- Fear of cyber breaches.
- Costly, time-consuming development process.
Moreover, a merchant must consider integration and ongoing operational cost before choosing a mobile wallet system as their preferred electronic payments solution.
Person to Person Payments
Also known as Peer to Peer or P2P payments, Facebook, Google wallet, and Venmo are some of the active P2P payment methods.
Pros
- Easy to transfer money directly from the sender’s bank account.
- Option for users to transfer money among themselves via a web interface, which could be a mobile app linked to their debit card or bank account.
- P2P payments can be made with solutions like Google Wallet.
Cons
- The payments model is limited to transfer of funds between peers and is of no use as far as eCommerce payments are concerned. As a result, as of now, this payments solution has nothing to offer most eCommerce merchants.
Social Media Payments
Considering the success of the Chinese WeChat model, Facebook and Twitter are testing potential commercial capabilities to launch their own social media payment systems. The Chinese model is an example for other social networks to learn how their platforms can serve as an ideal commerce medium.
Pros
- Easy for merchants to reach target audience, since social media is a widely accepted communication medium worldwide.
- Encourages eCommerce, thanks to ongoing live merchant-buyer interactions.
- Reviews and comments about products are out in the open in social networks kind of like word of mouth, which can convince potential buyers to make a purchase.
- Social media can influence impulse buying.
- No need for users to re-enter credit card details every time a shopper wants to make a purchase, since the information is already stored in their social media account wallet.
Cons
- Integration of electronic payment solutions with social media requires investment of time as well as resources.
- Lower average order value, as there aren’t options in social media sites to include other items to the shopping cart. But with time, these may be worked out and upgraded.
Other Electronic Payment Solutions
A number of other electronic payment solutions using newer technologies are in the early stages. These include Internet of Things (IoT), Wearables like the Apple Watch, and Blockchain like BitCoin. When it comes to the adoption of electronic payment solutions, you must weigh the pros and cons and try to determine which option serves your purpose best. Is its usage widespread in regions where you have a client base? Are there any cost benefits for you and your customers?
Related: More Payment Options Mean More Sales for eCommerce Stores
Of course, you won’t want to waste money on a technology that is plain useless to your enterprise. Wait and watch and then decide which electronic payment solution is the best for you or just stick with age-old payment methods.
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