Payment processing has changed a lot in recent years and there’s no doubt that it will be big in the coming years. And, by this means, there will be an increasing number of alternative payment methods, including bank transfers, crypto, buy now, pay later, mobile wallets, and more.
What is an alternative payment method?
Alternative payment methods depend upon instant exchange or credit card network usage. They are either cardless or cashless ways of paying for services and products. Alternative payment methods are of two types:
- APMs that require bank transfer: While making an online purchase, shoppers mostly make transfers through online banking. Online banking is not just fast but is quite convenient; for this reason, people mostly prefer using this method.
- APMS that depend upon the digital wallets: Digital wallet purchases are quite common; through the app, you can make credit card purchases with authorization.
If stats are to be believed, digital mobile wallets are expected to grow by 52% by 2023, with BNPLs expected to touch $680B by 2025.
Seeing such eye-opening stats, you might be wondering if you should immediately get into the latest APMs. So, if you want to get into this, here’s a list of questions you must ask yourself as a business before taking a new alternative payment method:
What are your business goals?
Immediately trying out a bunch of AMPs for the sake of a test and learning approach can be the right decision. But, practically, it can backfire. This also happens because adding a new alternative Donation Processing Platforms adds up to the additional cost along with the benefits.
To prevent the unnecessary expense, impact, or churn, you need to ask yourself:
- How would the new APM affect the reporting, settlement timing, and reconciliation
- Another important thing to ask is what business goals you are trying to achieve. Does the new APM meet the demands of your current customer base, drive high frequency or position your brand? Think about these things and then make a decision.
Lastly, don’t forget to consider things like reporting flows and settlement.
Think of the Customer Experience:
Adding a new APM will not automatically improve the customer experience; it would take time. And, if not executed properly, the result could be the opposite. Also, before adding a new APM think of how it will affect the customer experience. Keep in mind that a good customer experience is all about demographics. So, if something goes wrong, your customer will blame you, not the alternative payment provider.
How can they Help Meet the PCI Compliance Standards?
If your business doesn’t have PCI compliance, you may end up spending more money and time even after having the tougher security. The path to data security is more comprehensive, following new norms and versions of Payment Card Industry data security standards.
Therefore, to avoid any further requirements linked with storing customer financial data, you must consider the online payment solution that offers tokenization and vaulting and tokenization.
How can you help Streamline Reporting?
Easy access to reporting on disputes and settlements can speed the business decision. But, when every gateway and processor needs a different interface, it can be challenging to get comprehensive.
Why choose an Alternative Payment Method?
Most businesses, even now, are reluctant to offer alternative payment methods than the popular debit and credit cards. Perhaps, because of security and development costs, they refrain from choosing the APMs over other methods. Though there might be valid reasons, given a try, alternative payment methods can also fulfill the undesired issue and come with multiple benefits. Some of them are:
They can affect your Conversion Rate:
Along with a variety of payment methods, including the alternative payment method, your businesses can reach a wider audience. It takes a lot of resources and time to bring clients to your business and encourage them to make the purchase.
And, with so many modern amenities, it is very important to allow them to pay the way they used to. Failing this, your client may refrain from trusting your business and may wander off with your traditional marketing methods. So, not to let your clients go away from your website, make sure you have APMs installed.
APM Expand the Business:
It’s almost impossible for the merchants to get into ground zero to identify their audience’s preferences. People are more into comfort and convenience, and the new APMs ensure they get both.
Additionally, offering people a choice of using both local and international methods to pay to allow your business to get into any market.
Stand Against the Competition:
Various other e-commerce businesses are selling the same services as your business. So, it is important to offer clients their preferred payment method to stand ahead in the competition. Alternative payments are also faster and more convenient for the generation who wants everything to be done in minutes. And, offering things more advanced will deter the clients while offering them a choice to make your business stand apart from the crowd.
Ease out the Checkout Process:
In the world of doing things fast, taking out the credit card and filling in card details may seem overwhelming for many customers. So, keep them on your site by adding new and one-click-pay payment solutions on your website.
Increase Customer Loyalty:
Hackers these days have become more tech-advanced than ever; so it’s not surprising that businesses are more cautious about having card details. Also, for this reason, people are more reluctant about using their cards when paying online. At this stage, allowing customers to pay through other ways will give the impression that their security matters to your business and you are willing to adjust your business over security.
Knowing the factors that are important for your business and keeping in mind how a gateway can adhere to those requirements will help you take your business to new heights. Depending upon your business, you can benefit from using various gateways. An added payment gateway will also offer other benefits like reduced rates for processing specific transactions.
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