Online Merchants: Here are the Top 5 reasons why it is important to have a variety of payment methods available in your checkout!
Disclaimer: This article was written by Matthias Janocha, SlimPay’s VP Global Partnerships and Head of DACH
1. Low Card penetration in many parts of the world
While debit and credit card penetration might be high in the United States, in many regions of the world, it’s not. Introducing payment methods with a larger reach, such as Direct Debit or Carrier Billing, will result in a larger audience being willing and able to pay.
2. Serving the un / over underbanked
In the United States, up to 25% of the population is under or over banked. Even though people might have a bank account, they are accustomed to using cash or cheque, rather than paying with a card online.
3. Reducing costs of processing payments
Generally, a lot of local and alternative payment methods are much more cost efficient than credit cards or wallets, like PayPal, for the merchant, particularly those who don’t run through credit card networks but deduct the funds directly from the source, such as a bank account. Of course it has to be taken into account that some of these payment methods bear a higher risk for the merchant and don’t protect them from chargebacks. Thus, thorough and ongoing data collection, monitoring and interpretation is key for payment optimisation.
4. Reducing shopping cart abandonment by letting payments disappear from the customer journey
It is a fact that shopping cart abandonment can be minimised by offering the right payment method. Many people carry a significant debt on their credit card account, so they might reconsider piling it up even higher and prefer to pay with funds that are readily available, such as those on their bank account. Another efficient way of reducing shopping cart abandonment is through offering payment methods that can be “put on file” and support one-click purchases, ideally across all devices. Having to enter payment details for each and every purchase is cumbersome.
5. Lowering churn for subscription services and encouraging frequent purchases
Many online merchants rely on frequent buyers or even have monthly subscription business models. Just like we mentioned in reason #4, payment methods that can be put “on file” and don’t require any user interaction for follow up purchases will reduce churn and significantly increase the amount of returning customers. Another effective way to reduce churn, particularly for subscription services, is to avoid payment instruments that have an expiration date.
Want to find out more about payments and how SlimPay can help you onboard customers for payments, increase customer lifetime value and increase revenue? Meet Matthias and the DACH team at DMEXCO, 14-15 September 2016, Hall: 09 Plain: 1 Aisle: D No: 023!
