As more commerce shifts online, consumers are experimenting with new payment methods at a rate never before seen. According to our research, 30% of consumers in Europe want to try new payment methods based on their experiences in 2020.
Understanding the changing trends in consumer behavior matters because 60% of ecommerce consumers will abandon their cart if they cannot pay with their preferred payment methods.
But that's not all. Using the right payment method can lower the cost of transactions, improve acceptance rates and strengthen security. But how exactly can businesses use alternative payment methods (APMs) to reach new customers and super-charge growth? Here we look at five ways you can improve your payment method strategy.
1. Cater to your consumers
Ecommerce shoppers want a seamless checkout experience and offering them the right online payment option is part of this. Customers using mobile devices want to pay with passthrough wallets like Apple Pay and Google Pay. In the retail sector, buy now, pay later (BNPL) has seen rapid adoption by consumers.
Letting customers pay their way, wherever they are decreases cart abandonment and will prevent losing a sale to your competition.
2. Localize your strategy
Accepting alternative payments powers global growth, yet assuming what works in one country or region will work everywhere is a mistake. Payment preferences differ between countries and regions as much as within them.
Digital wallets like Alipay are popular in China, but that’s not the full story across Asia. The major card networks, such as Visa, Mastercard, JCB and UnionPay, still dominate, especially in Japan, New Zealand and Singapore. So, any business considering expansion in APAC should consider their payment mix carefully.
Meanwhile, in the MENAP region, national payment methods have strong government support and take-up. Selling online without KNET in Kuwait, OmanNet in Oman, or mada in Saudi Arabia is akin to leaving money on the table.
3. Consider the data
The key to understanding which payment methods you should be offering in each market is access to data. Market data that can shed light on payment preference, sector benchmarks and comparative APM costs. Understanding popular APMs in particular regions is one part of building your strategy.
The other is delving into your transaction data. Get to know which APMs deliver the best checkout conversion and cost the least to operate. Or which have the best acceptance rates and can best mitigate against chargebacks. In other words, what are the transactions going through your business telling you?
4. Keep up with the trends
New APMs are hitting markets all the time. Some may disappear without a trace. Others could become the next PayPal or Klarna. With customers increasingly swayed to shop by the payment methods on offer. Staying on top of APMs is a matter of competitive advantage.
Trends are often localized and increased demand for cross-border ecommerce has opened up a world of opportunity for businesses. Engage with your networks, survey customers and leverage the expertise of your providers to stay ahead of the trends.
5. Remove complexity
While it makes sense to offer customers the ability to pay using the payment methods they prefer, doing so isn't always straightforward. Businesses may have to contend with separate agreements, legal and regulatory requirements, technical integrations, testing, maintenance and so on for every payment method they offer.
Finding a partner that allows you to seamlessly add payment methods when needed through one integration is that way to solve this complexity.
Read our guide and get to know more about different payment methods and how you can develop the best strategy for your business.