“While credit card companies research and develop new anti-fraud measurements, alternative payment solutions providers are cashing in on the demand for online security and customer choice,” say the folks over at EcommerceTimes.
Does this ring true for your business? Are you offering your customers enough payment options to satisfy their needs? Last year Quality Service Associates polled 147 of the leading online retailers to weigh the benefits of offering multiple payment options. This poll showed plainly that the merchants who offer four different types of payment for their goods (such as E-checks, credit cards, PayPal and other similar types of payment options) converted up to 20% more of their visitors to customers than merchants who simply offered one payment type.
Quite the stark contrast to what most online retailers would have you believe. I remember when I first started out; I believed eBay when they told me that it’s perfectly acceptable to only use PayPal as a payment source. And it is! What they don’t say is that you will lose customers. It’s so much easier simply to deal with PayPal, and it feels much more secure. PayPal has over 86.6 million customers and their security and liability protection are amazing, so obviously, they will always be my preferred method of payment.
When you consider how demographics in online shopping are changing, though, you must go with the flow and adapt to meet your customers needs. Say you have a customer who is uncomfortable with using a credit card, or even a person who doesn’t have one. The number of people I know who refuse to deal with credit cards rises daily. You have to have payment options available for these visitors or they will simply abandon their shopping cart once they realize you have no option for them to pay you. And the item will remain on your shelf.
A new payment method option has recently hit the market. I would be nervous about it personally, but apparently eBay and online retailers such as Walmart, Overstock.com and SmartBargains disagree with me. This option is called Bill Me Later, and is a great option for those who don’t like the hassle of dealing with a credit card. They do run a credit check on you by collecting your personal info, but once approved, you can simply complete your online shopping and be billed after the fact. Hey, whatever works, right? It’s my hope that Amazon is the next company to latch onto this so that I can increase my sales. People love the idea of not having to pay upfront for things.
Western Union also offers retailers the option of accepting payments through them. To do this, your customers would be able to pay either online or at a retail store like CVS or Walmart and the money would be transferred to your account, minus some fees.
All in all, I think the days of simply using PayPal and accepting credit cards are behind us. It’s time to give our customers the most options we can in order to bring them all in. This is a tough decision to make, as there are a few drawbacks to offering multiple payment sources. Carefully weigh the benefits of having to deal with all the different payment options against the knowledge that it will drive an increase in sales, and decide which option is best for you. I know for me, I will always choose more sales.
Best of luck and feel free to let me know your thoughts on accepting multiple payment options in the comments below!
Respected as a trusted eCommerce speaker, educator, and entrepreneur, Kat Simpson has been a successful eCommerce merchant for over 10 years. She is an eBay Education Specialist and Silver Level PowerSeller, who also maintains stores on Addoway, Bonanza, Buy.com, and iOffer. Currently Kat is the producer of popular weekly Amazon FBA Podcast FBA Radio along with Chris Green of FBAPower.
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