5 advantages of having multiple payment methods

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The e-commerce market is growing bigger every year! As consumer demands continue to grow in the e-commerce market, it has never been more important to offer high-quality e-commerce experiences, resulting in retailers constantly looking for new ways to develop their online store’s user experience. One of the areas that always seemed to remain stagnant for increasing the user experience was payment options available to customers. So, what are the advantages of having more payment methods? Here is ANYDAY’s take:

 

Avoid basket abandonment

Report from baymard.com based on 41 different studies containing statistics on e-commerce shopping cart abandonment shows that an average of 69,57% of customers who shop online actually abandon the shopping cart during checkout. There are numerous reasons for discarded shopping carts, with the lack of payment options being one of them. Consumers tend to suspend proceeding to purchase if they fail to see their preferred payment option on the checkout page. 

 

Demographic coverage

Recently, it seems like there has been an explosion on the market with more and more different payment methods appearing on the market, which leads to a spread of preferences between the different demographics who like to pay in different ways. The generations, Baby Boomers¹ and Generation X², prefer credit cards where Millennials³ and Generation Z4 are more likely to use mobile payment apps like Apple Pay and MobilePay.

So, if your target group are Millennials or Generation Z and you do not already offer mobile payment methods in your gateway, it would probably be a big mistake not to add this.

 

Economic coverage

In the explosion with more different payment methods appearing, installment methods are one of them. With installment methods like ANYDAY Split and Klarna, you can reach out wider to the consumers, who do not necessarily have a large available amount every single month. Instead, you will offer them the opportunity to divide their payment over a longer period.

Let’s take the Christmas Sale, for example. Christmas can be an expensive month for many people. With ANYDAY Split your customers get the opportunity to divide their payment into 4 equal installments without any interests or additional fees. Let’s say your customer has a Christmas budget of 500 euros. That can be a huge extra cost for your customer that month, so instead of the customer living on a low budget for the rest of December, you can offer your customer to split the payment, where the person instead will have to pay 125 euro each month for the next four months.

To reach out wider to the consumers you can advantageously add an installment method to your payment gateway.

 

Geographic coverage

If you want to expand your business internationally, multiple payment methods can allow you to handle customers from different countries, who are paying with different currencies and prefer different payment methods.

The popularity of a payment method varies in different countries. For example, if you want to start doing business in the United States you should probably consider offering PayPal since it is a really popular payment method, and if you want to do business in Denmark, then MobilePay would be a wise choice besides Visa and Dankort, because of the rising popularity of this payment method.

To be successful in different regions, you will need to offer payment methods that the locals know and are comfortable using, which will increase the trust value of your online store.

 

Improve your conversion rate

Conversion rates are one of the most important things for your online store because with no consumers actually ending up buying your products, you will end up having no turnover. So, what has multiple payment methods have to do with your conversion rate?

Report shows that online stores should ensure that they always offer at least the top three payment methods in a given market or country because most shoppers will use at least one of them. It has been shown that providing the top three methods, rather than only the most popular, can increase conversions by up to 30%.

Multiple payment options help in giving your shoppers an enhanced user experience and converts them to a buying customer.

Choose your payment methods wisely and study their pros and cons to find a good combination, and don’t forget to have the 5 above steps in your mind doing it.

 

Want to read more interesting e-commerce news? Go to ANYDAY’s blog here.

Baby Boomers = 1946-1964
Generation X = 1965-1980
Millennials = 1981-1996
Generation Z = 1996-2015

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