Keeping an open mind on alternative payment options
This is an article ‘Keeping an open mind on alternative payment options’ by Marc Primo
The way we pay for our purchases today via digital means helps make more goods and services accessible to more people worldwide. In a highly connected world, thanks to contemporary technology, companies are becoming more open-minded about accepting alternative payment methods other than the traditional cash and credit card. In fact, doing so has proven to be good for business.
There are many factors why modern consumers have grown fond of alternative paying methods, especially during the pandemic disruption. In today's new normal, it has been crucial for eCommerce businesses to gain the most from the innovative methods that enable more to make safe, easy, and convenient online purchases without leaving the house.
Let's find out more about why alternative payment options influence various industries, from Web3-powered payments to tokenomics or cryptocurrencies to E-wallets.
The many variations of alternative payment methods
With the birth of the Web3 internet, which mainly integrates concepts dealing with decentralization, blockchain technologies, and token-based economics, alternative payment methods have become more prevalent in how customers pay for their purchased products and services. Initially serving as substitutes for more traditional payment options like cash or large credit cards during the pandemic, such options utilizing prepaid cards, E-wallets, and crypto payments are now the preferred ways to pay for goods.
Aside from the conveniences they offer, including not carrying cash on hand and well-monitored transactions, these new payment methods also provide contactless, safe, and secure real-time exchanges between merchants and customers. Earlier iterations of contactless payments will include bank transfers or loyalty programs through points and rewards.
The pandemic has accelerated customers' adoption of alternative payment options throughout the country. The use of cash has decreased in the US, and this trend is likely to continue as contactless or digital payment options become more commonplace in brick-and-mortar stores and the digital space. The use of digital wallets, for instance, is predicted to increase by 85% by 2025, going from a total expenditure of $5 trillion in 2020 to more than $10 trillion in the next five years. The ease and security these software and hardware innovations provide are why digital wallets have become easy to adopt for even unbanked individuals.
Taking the world by storm
The use of alternative payment methods is expanding globally. Considering that 57% of Germany's consumer population now use PayPal as their preferred online payment method, more tech startups are looking into how they can push the boundaries for modern payment processes in the digital space. According to a Consumer Payments Survey conducted in 2019, Australians also prefer electronic payment methods, primarily contactless card payments, that increased by 50% in the same year. Consumers in Denmark also showed a 70% increase in online payment options via IDEAL in 2021.
Despite being referred to as "alternative," several merchant businesses and service providers have also started publicly embracing innovations such as digital wallets, buy-now-pay-later plans, and direct debit payments. In contrast to credit card payments, which account for only 20.1% of all payments in Asia Pacific countries, E-wallet payments account for 58.4% in the region.
The way consumers now prefer to pay through digital means has forced more businesses to adjust so that they can meet evolving consumer demands that seem to be significantly influenced by technology. You're simply making your company more available to your clients by looking into other payment methods for transactions making the additional budget for such innovations a good deal for your ROI in the long term.
On the other hand, the simple fact for businesses that still don't find merit in shifting to alternative payment methods is similar to how they would refuse to tear down walls that can lead to more sales. Embracing the technology that aligns you with innovations like Ecommerce, blockchain, E-wallets, or tokenomics can break traditional barriers and allow more of your target market to discover, use, and buy your products or services in various channels.
Modern payments in the world of Ecommerce
Any company can get into Ecommerce but if you decide to do so for your business, make sure you know the ins and outs of alternative payment methods because such innovations are essential. In eCommerce, digital payments are the usual means to transact with customers regarding their purchases. What has once been considered a substitute for traditional transactions is now a must-have for any enterprise.
This insight is supported by the fact that they offer more ease and security for online transactions. Alternative payment methods provide eCommerce merchants with fewer payment inconveniences and irregularities, which customers frequently view as a major turnoff. Due to such inefficiencies or unclear payment processes, most customers abandon their carts. However, If you provide your customers with a seamless transaction with just a few clicks, the more you can earn their loyalty and higher chances for more upcoming purchases.
It would also help to know that offering your customers limited payment options might steer them away from you and toward the competition. Not all consumers feel comfortable using their cards to make online purchases. It's best to look into how you can utilize E-wallet or cryptocurrency methods—of course, conducting market research on which payment method your target market prefers will always boost your conversions.
Since alternative payment methods are also being embraced by global consumers, investing in these innovations for your business can prepare you to expand your ventures to cross-border territories. In short, today's digital means can make things bigger and easier for you as you run your operations.
Today's consumers want to have access to services that are quick and flexible. Giving them ways they can transact easily with your business engages them deeper into their respective customer journeys and builds trust for your brand for increased awareness, leads, and sales.
As the way we pay continues to evolve, it's best to acquaint yourself with various fintech providers with a good track record with their Ecommerce clients. Doing so can reduce instances of fraud while meeting your customers' demands, whether on a local or global scale.