As the world transitions to the digital space, there’s no denying that shifting to eCommerce has presented exciting opportunities for entrepreneurs.
Building a website, a strong social media presence, and other online channels are great ways to reach customers you might not get at your physical stores. With these points in mind, all businesses should take advantage of the broader reach that online selling provides.
The main selling point of eCommerce platforms and services is their convenience and ease of use. Your customers won’t need to leave their houses to make a purchase, making them more likely to transact with you.
In that same vein, you should provide multiple online payment methods to help your customers complete a transaction as seamlessly as possible.
As more businesses go online, taking note of online payment and other eCommerce trends is essential to keep your business thriving. This guide discusses everything you need to know about payment methods for eCommerce to help you build your online store.
What are Online Payment Methods?
Simply put, online payments refer to transferring money through the internet and other digital means. There are various ways a consumer can pay online, and that payment is usually between a merchant and a customer.
As digital transformation persists, it’s clear that businesses must adapt and provide multiple payment options for their clients.
According to the World Bank, 12% of adults in the Pacific made their first online payment during the pandemic. While cash is still the public’s most preferred payment option, more and more businesses are pursuing digitalization due to the impact caused by COVID-19.
Why Do I Need to Provide Multiple Payment Options for My Customers?
eCommerce brands should want their transactions to be as convenient as possible. Here are the reasons you should have multiple payment options for your business.
- Improve the customer experience
Multiple payment methods allow consumers to personalize their experience with your business. Some of your customers may be using credit cards while others may be using payment apps and giving them multiple options will lead to a pleasant transaction and a convenient checkout. In turn, this doesn’t only increase the chances of a purchase but will also increase the likelihood of future transactions.
Improving the customer experience will ultimately result in customer loyalty. Having multiple payment options hits two birds with one stone since it is an easy way to increase sales and boost customer retention.
- Reduce cart abandonment
It’ll be tragic if a customer goes through the process of picking a product or service from your business and then adding it to their cart, only to end up abandoning the cart because their preferred payment option is unavailable.
Multiple payment methods allow consumers to pay how they want, reducing the likelihood of cart abandonment.
- Provide a backup
Similar to the previous point, having multiple payment options can provide backup options to customers should their first choice fail. For example, if your site only has the credit card payment option and the customer’s transaction is denied, they’re forced to look for a different supplier.
More options provide redundancies that can replace each other, keeping more customers from switching sites.
- Appeal to a broader demographic
Different consumers have different preferences when it comes to payment. Some refuse to pay with anything but cash or debit cards, while others are the opposite and only use online apps. If you have both options in mind, you cater to all demographics for your company, attracting more customers to your business. - Increase brand trust
Customers can be hesitant to provide their credit card information to a website they don’t trust. Having trusted payment options such as Maya or GCash can improve the image of your business and tell customers that you’re trustworthy.
7 Online Payment Methods for eCommerce Brands
Now that you know why multiple payment methods are beneficial, let’s look at some options available for your business and dive into their pros and cons.
- Credit and debit cards
Credit and debit cards are a simple, no-middleman method for making online purchases. However, as previously mentioned, consumers might only be comfortable sending card details to a business they trust.
If your business is just starting, this payment option might not receive much attention, though it’s almost always included. Many people will appreciate its inclusion once you’re more established.
- Bank transfers
This method is popular because almost everyone has a bank account. However, this requires you to set up a commercial bank account, which can mean a lot of paperwork. It also circumvents the security concern of giving card details. - Prepaid and gift cards
Prepaid cards are like credit cards that scale off the amount deposited. These are popular with people who don’t have bank accounts or credit cards, as they can still use these to purchase from your store.
Gift cards are like prepaid cards but are usually given out by businesses as loyalty rewards instead of requiring the consumer to deposit the amount.
If your demographic leans towards younger people who likely don’t have bank accounts yet, you should consider including this method.
- Payment apps
Payment apps like Paypal and Maya have become very popular among consumers because they’re extremely convenient and offer secure ways to transfer and spend money. These apps can be linked to your bank account and allow for online spending without the security risks. - Digital wallets
Digital wallets are safe online storage for your money or banking information. Making popular digital wallets like GCash available for your business helps make your store more accessible to more people. - "Buy now, pay later" or instant financing
In this method, businesses give customers interest-free loans at the price of what they buy. This option solves the customer issue of insufficient funds, but it can lead to customers defaulting on these loans.
If your business sells more expensive products or services, this option can help convert more consumers.
- Cryptocurrency
Cryptocurrency use has skyrocketed in prevalence in recent years. According to Bankrate, over 19,000 tokens have been created since the original bitcoin. Cryptocurrencies can work similarly to digital wallets but can also be more exclusive due to the initial investment they require.
On top of this exclusivity, there are concerns about cryptocurrency’s environmental impact, which can negatively affect your brand’s image. It would be best to consider your brand’s target demographic before including this payment option.
Convenience is King in eCommerce
When building your online store, always think of your customers and how to make their journey easier. Now that you know the different online payment methods and why they’re important, you should consider implementing them ASAP.
If you’re just about to expand your business online or if you’re still in the process of building an online store, we’ve got you covered. Rush is the best eCommerce platform in the Philippines, and our services can help you create a profitable eCommerce brand in no time. Read our in-depth eCommerce guide or contact our Sales Champs to learn more about our solutions!
