Taking online payments requires a bit of discernment. You have to figure out what third-party platforms are most secure, if you want to be in charge of collecting credit card numbers or banking info and what your customers want to use.
What Do Consumers Want From Digital Payments?
A recent Business Wire article reported around 73% of consumers choose where to buy from based on available payment options. In addition to wanting digital payment options, most consumers say they won’t pay convenience fees to use a credit card but they are willing ot use ACH if it saves a fee.
Understanding online payment trends can help you choose what’s most beneficial to attracting new business to your online store. Here are some of the ones you should be aware of.
1. Peer-to-Peer (P2P) Payments Are on the Rise
The economy is tough right now. People are no longer willing to foot the bill when ordering pizza for a gathering or splitting a dinner. P2P payments are one of the popular trends of the moment. People Zelle each other or use cash payment apps like PayPal and Venmo to split costs.
If you sell an item that is used by groups of people, give them a way to split the payments up to attract more buyers.
2. People Want to Avoid Late Penalties
Many millennials and younger workers report struggling to buy their first homes and make ends meet. The rising cost of housing hits hard in most cities in the United States. In order to save a little money, young consumers look for ways to cut costs.
One thing many do is avoid late penalty fees by automating payments. However, if they see the cost of your item is more than they can pay off in a single bill cycle, they may wait instead of buying today. Fortunately, you can offer payment splitting options such as Affirm or PayPal’s Pay in 4 to split payments across four months.
Because another party collects the payments, you reduce the risk of nonpayment.
3. Credit Cards Still Rule
People are shopping online more since the pandemic. Familiarity has made most people more comfortable with using their credit cards online without the fear they once felt sharing the numbers.
In March 2020, the number of people paying with a card-not-present was more than those paying with a card-present for the first time in history. The trend remains to this day and is likely to increase as people order online more and more.
4. Cryptocurrency Has Issues and Benefits
In November, digital currency platform FTX filed for bankruptcy, tying up users’ funds and making it iffy if they’ll ever get the money back. Even though cryptocurrency has taken hits in recent months making it seem unstable, it is still an acceptable form of payment for many.
There are both benefits and disadvantages to taking digital currency such as Bitcoin as payment for your products. You may not like the risk, and that’s fine, but you should at least consider if you might increase your customer base by offering the option and if your business can handle the risk.
5. Contactless Paves the Way
When the pandemic hit, businesses scrambled to find a way to still serve their customers without spreading germs. At first, no one knew just how easily COVID-19 spread or what was risky. Contactless payment methods became the norm for carry-out and delivery services.
As people adapted to living with a pandemic, they returned to restaurants and grocery stores. However, they still wanted ways to pay without physically using a card. If you run a brick-and-mortar store, you’ve likely seen more people using their Apple Pay or tapping their credit cards rather than inserting them into the point of sale machines.
Online trends lean toward easier ways to pay, such as utilizing one-touch payments. Since many users may get on your site via their smartphones, you’ll want to make payment methods as simple and intuitive as possible.
Watch Financial News
As artificial intelligence advances and new payment methods come on the horizon, expect trends to shift and change. Pay attention to financial news channels and online blogs. Read widely, see what your competitors accept for payment and stay on top of trends. Offering your customers what they want benefits your business and helps you retain current customers while attracting new ones.
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