What are Alternative Payment Methods and Why do They Matter?

Alternative payment methods provide a track for customers to buy goods or services without standard payment methods like cash and major credit cards such as Visa and MasterCard. Alternative payment methods consist of prepaid cards, eWallets, bank transfers, and payment installment options (i.e. buy now, pay later). Now that technology is allowing eCommerce and saas businesses to deal online, more customers are preferring digital & mobile payments.

Let us explore all types of Alternative Payment Methods

1. Digital wallets. Sometimes they are also known as eWallets. Digital wallets allow customers to fill their accounts with sufficient funds for future dealings.
2. Mobile Payments. Mobile alternative payment methods authorize customers to upgrade their mobile apps with funds. Google pay and Apple pay are the most popular applications and permit customers to process online payments and QR code and SMS transactions.
3. Bank Transfers. A bank transfer is a process where funds are directly sent from the customer’s bank to the merchant’s bank.
4. Direct Debit. Direct debits are famous for subscription-based transactions. Customers provide businesses with the permission to deduct a specific amount of money at a prespecified time for goods or services that are offered.
5. Buy Now Pay Later (BNPL). BNPL allows customers to buy anything, and pay later or distribute the cost over a few months. The most famous payment platforms do not charge any interest fees, which makes them very famous among shoppers who don’t prefer credit cards.
6. Cryptocurrencies. 72% of British customers state that they will never prefer cryptocurrencies because of volatility. Yet, cryptocurrencies have enormously increased in popularity, and the more durable currencies such as Bitcoin are repeatedly used to buy products online.
7. Local cards. Most companies across the world are issuing debit and prepaid cards that can only receive in a single region. These card plans are famous because they can serve local requirements.

 Alternative payment methods across the globe

1. Alternative payment methods in the United Kingdom

Credit cards are the most popular way to pay for goods accounting for 55% of transactions in 2018. When the use of digital wallets is considered for 28% of transactions and this is launched to increase to 34% by 2024.

Connected with direct debits, bank transfers, and other payments, alternative payment methods will surpass cash and cards by 2024. Apple Pay, Google Pay, and Paypal are conducting this increment in market share.

2. Alternative payment methods in Europe

In Europe, digital wallets, specialist payment solutions, and debit cards fund 48% of transactions online. For online sales, this ratio reaches 58%. Similar to the UK, the way consumers pay for products and services continues to grow.

Almost 54% of European merchants prefer to accept credit cards, and 32% are glad to accept an alternative payment method such as a mobile wallet. 9% of merchants would also prefer it if customers paid in cryptocurrency.

3. Alternative payment across the rest of the world

Alternative payment methods are basically more famous across the globe. Banking infrastructure is not that built-in in Africa which has assured mobile payments have created much faster inroads into updated markets. In China, mobile payments have been considered for 93% of in-store and eCommerce transactions in 2019.

In North and South America, credit card payments are still the prevalent mode of payment. However, digital wallets are expanding in popularity. Apple Pay, Google Pay, and Buy Now Pay Later platforms are driving changes in customer behavior.

What are the benefits of alternative payment methods?

1.     Improved sales

The analysis is reflecting that around 80% of carts get renounced by customers. There are numerous contributing factors consisting of a shortage of guest checkout, high delivery charges, and unnecessary from areas.

Decreasing all these barriers to pay is necessary to retain your renounced rate low. Across 8% of purchases go incompleted because of a shortage of payment methods.

Whether you have an eCommerce store or a brick-and-mortar shop will have some global customers. Even if you don’t sell products globally, you may have customers who are exploring the UK or staying here temporarily.

You will have to subtract all of your obstacles to pay and assure that not a single customer is prevented from paying for your products or services. This will form a decent shopping experience that will increase your conversion rate.

2.     A better-protected business

Research in 2014 found that 16% of shoppers renounced sales because they had problems with payment security.

Paying via a local payment method is not naturally safer than using a credit card. Yet some customers have a review as it is.

Typically, when opting for a digital wallet, or buy now, pay later platform you are only required to provide your username and password. This can feel safer for certain customers.

Some smartphone users also use face ID and fingerprint recognition to lower the risk that someone uses their smartphone and fake uses their digital wallets.

Each customer has their own concerns for selecting to pay the way they prefer. At WebPays, we understand how important it is that customers can pay according to their choices. And that’s why our technology allows merchants to receive over 26 local payment methods.

Additional Perks of Alternative Payment Methods

1.     A faster checkout

Especially customers who are shopping online can be very sensitive. If there are a lot of forms to fill in during the checkout process or delivery is not fast enough and merchants would not complete sales.

One method to enhance the checkout process is to use local payment methods. Often, someone using an eWallet or phone payment method has to function far rarer actions than someone using a credit or debit card.

2.     A better customer experience

Some years ago, if you don’t have the funds to make a costly purchase your only options were to prefer a standard payment method such as a credit card or debit card with a repayment.

Local and alternative payment methods are offering even more payment methods for customers to make purchases even if they don’t have the funds in their account. 

How to integrate alternative payment methods into my online business?

There are many ways to pay for transactions and linking them to your checkout experience can be a long and time-consuming process.

What you have to do, will rely on which specific alternative payment method you are interested in. Yet, you will easily integrate a payment platform that incorporates multiple payment methods.

Our payment platform is easy to use and simple to integrate. So, you will have to open a merchant account with us and you can accept more than 26 of the most popular payment methods instantly.

If you would like to discover how your business can get additional local payment methods, contact us at WebPays.