3 new reasons to use alternative payments
June 14, 2012 Leave a Comment
Alternative payment services such as PayPal, Bill Me Later and Google Checkout are now commonplace on eCommerce sites, with good reason. Industry researcher Forrester estimates that fully one in five eCommerce transactions are completed using alternative payments, reaping merchants $64 billion in U.S. sales. That percentage will grow to nearly one in four — 23% — in the next four years, Forrester predicts. It’s not surprising, then, that when we surveyed checkout processes last fall, nearly 60% of the largest U.S. merchants already used alternative payments.
While the prospect of implementing a new payment process may cause logistical headaches, we believe merchants should make the project a priority. Alternative payment options smooth the path to purchase for Web shoppers — and new research suggests alternative payments are crucial for expanding into new channels and markets. Alternative payments:
1. Facilitate mobile buying. In a study of mobile purchases made over the past two months, 67% of those transactions were completed using an alternative payment system versus a credit card, according to a study from eCommerce provider ShopVisible. By giving shoppers a way to avoid entering credit card payment details, alternative payments help overcome two top barriers to mobile purchasing:
- Convenience. In the 2011 MarketLive Consumer Survey, conducted prior to the holiday season, the top reason shoppers gave for not making mobile purchases was “shopping is still too awkward on my phone” — an opinion shared by 37% of survey participants. Alternative payments help speed the purchase process.
- Security. Nearly one-third of consumers are anxious about sharing credit card information over their mobile networks, the MarketLive Consumer Survey found. With alternative payments, shoppers need only enter a username and password, and their financial information isn’t shared.
To reassure mobile shoppers who are hesitant to become mobile buyers, merchants should highlight the availability of alternative payments within their mobile shopping environments, as MarketLive merchant Armani Exchange does on the home page and category pages within its mobile site.
2. Appeal to international customers. For merchants casting an eye toward the rapidly-growing European eCommerce market, alternative payments are a must. PayPal is used by half of online shoppers in the U.K. and Germany, and by 40% of European online shoppers overall, according to Forrester. U.K. mass merchant Argos highlights its PayPal service on the eCommerce site home page in a promotion messaging “easy online shopping.”
3. Connect online and offline purchasing. With 15 major merchants now planning to use PayPal at physical store point-of-sale terminals, alternative payments are becoming a means for consumers to make purchases wherever they roam. Such integration creates a seamless shopping experience for buyers, while for merchants, the ability to track purchase data across channels and devices helps build a holistic profile of customer behavior.
How are you promoting alternative payments? If you haven’t yet adopted alternative payment systems, what’s holding you back?