Why Offering a Variety of Payment Methods Is Crucial for Online Businesses and What to Consider

Why Offering a Variety of Payment Methods Is Crucial for Online Businesses and What to Consider

29 Feb    Business, Finance News

Incorporating a suitable combination of payment methods can have a tremendous impact on the success of an online business.

Nowadays, the number of available payment options increases continuously, with digital methods tremendously shaping the payment landscape and changing the way customers pay for goods and services. With the growing variety of options, any online business should consider its customers’ needs, review its existing payment methods, and choose a suitable mix of options to increase performance and efficiency.

Review Possible Payment Options

As there are many payment options available today, each option should be reviewed carefully. This is not a “one size fits all” case, as every business and any customer base is different. Make sure to understand and evaluate the different options to see which ones would be most suitable for your particular business. Some of the most common payment options are credit and debit card payments. By paying with a credit card, a debt with the credit card provider is created, whereas when paying with a debit card, the amount due gets deducted from the customer’s bank account. Meanwhile, with direct debit payments, customers authorise businesses to collect payments directly from their bank accounts.

Modern ways to pay have now been added to the mix, as digital wallets such as PayPal and Apple Pay make up a continuously bigger market share. To use these, customers open an account with the payment service provider and either pay a deposit or add their preferred payment details to their digital wallet. To pay on your website, customers then only have to insert their login details and authorise the payment. For the most innovative businesses and customers, cryptocurrency payments are yet another option that allows transactions via digital currencies such as Bitcoin and Ethereum. Each of these options features its very own characteristics, advantages, and disadvantages that should be considered.

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Focus on Your Customers’ Specific Needs

Offering the right mix of payment options that are geared towards your customers’ specific needs can have a tremendous impact on your conversion rate and sales. Today’s web users are used to having various payment options available to complete their purchases. Failing to offer their preferred option creates friction in the final step of the sales funnel and may cause them to abandon their purchase completely. To avoid unnecessary cart abandonments, companies have to offer the right options for their target group. For this, analyse your customers’ needs and study their preferences and behaviours.

For instance, studies have shown that UK users prefer using direct debit payments to pay for recurring payments such as subscriptions for streaming services like Netflix and Spotify. With these, customers are authorising the company to deduct the subscription fee straight from their bank, which allows for fast, easy, and automatic payments. Meanwhile, digital wallets have taken over the online shopping space, with payment options such as PayPal now prevalent in most online shops.

Mobile users, on the other hand, may prefer using mobile payment providers, such as Apple Pay or Google Play. These are especially suitable to pay for games and apps downloaded from the app store but can also be used on mobile browsers and for in-game purchases within apps. Those providers offering casino games online where both deposits and withdrawals play a key role must consider their target group’s specific needs. Many best-rated platforms offer a variety of options for fast, safe, and convenient payments and withdrawals, so players can easily place wagers and receive payouts quickly. These aspects factor into the customer’s overall experience and can make or break their experience with a company.

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Evaluate the Costs

You might think that offering as many payment options as possible should satisfy the largest number of customers. However, it is crucial to keep your gross margins in mind and choose payment methods wisely to improve your business’s efficiency and overall long-term viability. Some costs you’ll need to consider are set up costs, service fees, and transaction costs that may be charged monthly or for each transaction. These costs need to be evaluated and reduced in a smart way to minimise the cost of sales, increase gross margins, and improve overall profitability and efficiency.

Offering the best possible mix of payment options to your customers can boost your business’s success, by reducing friction during the checkout process. Make sure to consider these aspects and take time to pick and review the payment options your customers want to increase sales.

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