The growth of eCommerce shows no signs of slowing down. In fact, according to Statista, 2.14 billion people globally will buy digitally by 2021.
Once credit and debit cards, the preferred online payment option has now shifted to Alternative Payment Methods (APMs). Popular APM services include real-time bank transfers, eWallets, prepaid cards, offline credit transfers, mobile payments and more. They make up over half of total eCommerce purchases. This alone highlights the necessity to better understand consumer payment preferences as a key area for future business growth.
So, what’s next? Shall we all get rid of credit cards offered on our sites and add loads of new alternative payment methods to optimise conversion rates?
Firstly, credit cards still remain the preferred payment method. After all, 35% of all online purchases are still made via this method (source: Statista). Keeping cards as a payment option covers all bases, even when you are operating in a territory where cards are scarce. However, offering cards alone as the ‘default no matter what’ will not cater for all preferences. The same applies to add all available alternative payment methods as this may confuse customers, resulting in them abandoning your checkout pages.
Offering locally used and recognised alternatives means giving customers the option to pay with payment methods they know and trust. For example, German shoppers are likely to make a payment using a direct debit from their bank account versus a credit card. Therefore, it’s important to undergo sufficient market research in order to satisfy your target audience and stand out from the competition.
Processing 39% of total eCommerce purchases, are e-wallets, followed by real time bank transfers (11% of the market). Both payment types are expected to grow by more than 10% in the next few years.
Businesses who cater for local preferences will sustain high conversion rates by meeting forever-changing customer needs.
As the demand for more online payment options grows and the popularity of cards declines, the natural competition to win more customers intensifies. Therefore, it is important for merchants to choose a payments partner who is well-versed with the alternative payment market.