It wasn’t so long ago that customers were broadly accepting of the preferred method of payment of the merchant. Whether we needed cash or a card to buy the product or service we wanted, we were happy to go along with what was requested.
Not so nowadays. It’s unusual for any customer of any organisation – retail, ecommerce, financial services and local government – not to have the convenience of choice when making a purchase. Even schools are offering a range of payment options so they can collect monies for a school trip or donation to the PTA more efficiently. The UK is certainly not alone in this emerging culture of payment choice – it’s an international phenomenon which has seen payment trends changing across the world.
Hence why it’s so important for anyone accepting payments to embrace the world of alternative, or local, payment methods.
What is an alternative payment method?
Put simply, an alternative payment method (APM), also known as a local payment method (LPM), is a payment which isn’t made by cash or card, i.e. a payment which isn’t paid by traditional means. If you use, say, PayPal or Visa Checkout, you’re using an alternative or local payment method.
With people increasingly making use of digital wallets, biometrics and online banking, APMs are becoming more and more popular – already at Pay360 we currently offer over 50 APMs…and there are more on the way.
Why are so many customers choosing to pay by alternative payment methods?
It’s largely about security and convenience. When purchasing from an unfamiliar website, there’s reassurance in seeing familiar payment pages pop up when it comes to handing over one’s hard-earned money. The customer’s APM of choice will be a well-known brand and electronic form that they recognise and trust. In addition, with many APMs adding an additional layer of both buyer and seller security, purchasing from unknown territories or regions isn’t as scary as it used to be.
And, of course, it’s so much quicker and more convenient to enter an email address and password than to fish around in a wallet or purse to find the right card details to enter. Taking into account that many APMs such as Visa Checkout now also offer a one click checkout process, payments can be made in record speed.
It’s been forecast that by the end of 2022, an incredible 47.4%¹ of all online transactions will be made using alternative payment methods. Or perhaps it’s not that incredible, bearing in mind a comment I made in a previous blog about how teenagers coming of age in 2020 will transform the payments landscape even further with their confidence in using the very latest technologies and their expectations of convenience.
Holding the key to unlock international markets
Alternative payment methods are like sitcoms: although there are some exceptions which manage to transcend international and cultural boundaries (Friends and Fawlty Towers, I’m looking at you), each nation has its particular preferences.
Which is why, to ensure we keep pace with both domestic and international trends, we at Pay360 continually add to the considerable number of LPMs we offer. We work with our valued partner PPRO who enable us to offer an impressive number of local payment methods on a global scale with single integration, single contract and single settlement. Many of these are even available for instant go-live, including GiroPay, TrustPay, Sofort, Boleto and Bancontact, to name just a few. Take a look at our current list of available APMs – which we’re adding to all the time – and do get in touch with us if there are any missing which you’d like to offer.
Where you can reassure customers that their money is being handled by their usual payments service and that they’re not leaving themselves open to fraud by transacting with you, you open up many more opportunities to increase conversions and maximise your revenue.
3 quick steps to ensure you’re maximising opportunities for growth
Whereas there really was once a time when businesses had the luxury of dictating how their customers should pay, those days are long gone for any organisation wishing to engage successfully with their target audience. Indeed, research shows that 50% of regular shoppers cancel their purchases and abandon checkout if their preferred payment method is not available.²
Here are 3 quick and easy steps you can take to ensure a focused, successful payments strategy:
- Identify your customers’ spending preferences
Whether you’re selling bespoke carpets or car insurance, look at the payment behaviour of the country and the demographic groups you’re targeting. You can boost conversion rates by up to 70% if your website is properly localised, such as including support for locally preferred payment methods.³
- Decide which payment options to offer
In this instance it’s definitely the more the merrier when it comes to customer choice, but you don’t have to jump in at the deep end. At Pay360 we offer flexible arrangements so you can start with as many or as few APMs as you’d like, then add or remove to suit your evolving needs as your business grows.
- Make sure implementation is as smooth as possible
Complicated, separate integrations take up valuable resources, both in terms of income and staff time, so make sure your payment provider makes it as easy as possible to set up and maintain those methods. With Pay360, you need just one implementation to access a wide, growing list of alternative payments.
Get in touch
If you’re interested in exploring opportunities for growing your customer base through secure, convenient payments, including alternative payment methods, please do get in touch and we’d be pleased to talk you through the options which would best suit your organisation’s aims and aspirations.