With online shoppers limiting their credit card use and relying more and more on alternative ways to pay, we’re seeing a higher demand for alternative payments than ever before. But that’s not the only motive for merchants to offer more payment options. Here’s a look at the top 3 reasons why merchants should offer alternatives to credit cards.
1. To lower overhead costs For decades, costly credit card processing fees have cut into the profits of retailers—especially online retailers who are subject to higher “card not present” rates. Just as cash payments offer a bit of credit-card-fee-relief for brick-and-mortar stores, alternative payments can help online stores reduce the amount they spend every month on credit card transactions. Many alternative payment systems offer much lower transaction fees than credit cards, while others charge nothing at all. There is no charge for merchants that buy paid search terms on Google to use Google Checkout. And TrialPay is absolutely free for any merchant to use.
2. To access more customers Today’s consumers have many payment preferences, and you can increase conversions by appealing to them all. Many shoppers prefer the security of alternative payment options that don’t require customers to enter their personal financial details on the Web. Some are shifting towards cash payments in an attempt to prevent getting further into debt, while others simply don’t have a credit card because so many banks are lessening their lending. As I said in my earlier post, more ways to pay simply means there are more ways to buy. Offering several alternative payment methods, such as Bill Me Later, Pay Pal, eBillme and TrialPay, ensures that you will attract shoppers no matter what their preference is.
3. To increase conversions Not only do they are they cheaper than credit cards and help merchants appeal to more customers, alternative payments also inherently increase sales. CyberSource reported that in 2006, retailers who offered three or more payment options saw on average a 14% increase in conversions. And Forrester Research contends that alternative payment methods help increase sales and reduce shopping cart abandonment. For example, Google Checkout simplifies the checkout process, which can prevent cart abandonment due to a lengthy and complicated checkout. And TrialPay convinces shoppers to complete their purchases by offering a compelling incentive—a chance to get their products free just by trying or buying something else.