In this world of modern retailing, technology gives businesses the capability to accept customer payments from anywhere and at any time. So why are so many merchants missing out on sales? Surprisingly, many of them are still limited by the payment options they offer their customers, which hinders their ability to maximize profits and grow their respective companies.
According to Worldpay, alternative payment methods overtook card payments for the first time in 2015. As eCommerce continues to grow in popularity, so will customer needs and payment channels. That being said, there a host of reasons retailers should offer their customers multiple payment options. Let’s take a look at three of them:
Ecommerce has paved the way for a variety of new payment types, and since making purchases online has become a way of life for so many of today’s consumers, it’s a good opportunity for business to increase sales. Visa card payments have made it possible for web-based sellers to significantly increase sales that wouldn’t be possible if customer payments were limited to cash or check.
Just by accepting Visa payments, businesses can save the time and money it takes to chase down past-due or NSF checks, and get money quicker by having it deposited directly into their business accounts. But there are additional forms of payment types that businesses can accept to help boost their bottom line. In fact, CyberSource research firm points out that merchants who accept payment types beyond credit cards, such as gift certificates, e-checks, etc., generally see significant increases in online sales.
Multiple payment channels also help capture new customers. For example, Millennials are a digital generation who prefer online/ mobile shopping and payment methods. By optimizing company websites for mobile browsing and purchasing, businesses can attract some of these Millennial consumers—the largest living group today—who are expected to spend $1.4 trillion by 2020, according to Alacriti.
Regardless of the industry, from flower shops to scuba diving specialty stores, adding the flexibility of multiple payment platforms to their profit strategy will help businesses modernize their services, appeal to new consumer markets, and deliver more value and convenience to customers…which, in turn, will help them increase their revenue.
Enhance The Customer Experience
Providing an exceptional customer experience is one of the most important components of good business strategies. Because payment methods presented at checkout can impact how the customer feels about the purchasing experience, POS systems that accept multiple payment methods are a vital tool in providing customers with a better experience.
While businesses throughout the world are shifting toward electronic payment methods, it’s important to remember that some consumers are still writing checks. A 2014 LinkedIn article indicated that checks remain a popular method of paying for goods and services.So, even though check writing has decreased in the face of online bill pay, there’s still a surprising number of people who still prefer checks to other payment methods.
Retailers concerned with providing the best customer experience for their shoppers should therefore find ways to accommodate this need. Using electronic check processing equipment will draw higher satisfaction from customers who can’t let go of their checkbooks. Of course, as mentioned earlier, there are some drawbacks to accepting check payments, so companies need to consider what will work best for their customers and how that will potentially affect their revenue growth.
For the most part, retailing has experienced a tremendous cultural shift as customers look to the Internet for more and more of their shopping needs. Consumers are becoming accustomed to making purchases on their mobile devices and need the convenience and quickness of mobile payment solutions. Additionally, social payments through platforms like Twitter and Snapchat are gaining in popularity, and this need should be addressed as merchants deal with mobile payment strategy.
It’s been said that customers don’t remember the middle portion of their shopping experience with retailers so much as they recall the beginning and end of their experience. Something as simple as providing customers with more ways to pay at checkout can leave a positive impression on them, as well as significantly impacting the way customers feel about their overall experience.
Increase Customer Loyalty & Repeat Business
Small Business Trends cites research from Bain & Company, that shows how a 5% increase in customer retention can boost profits as much as 95%.
So, busineses striving for success need to retain a loyal base of repeat customers. That’s because loyal customers tend to be conversion-friendly and are more likely to influence others to purchase from the same company, points out Duct Tape Marketing.
One way businesses can set themselves apart from the competition and increase customer retention is to stop thinking of payment methods as an afterthought and/or stop overlooking them altogether. Giving customers the convenience and flexibility they crave by offering multiple types of payment options reduces shopping cart abandonment and enhances their shopping experience (a compelling reason for consumers to choose one business over another).
In a survey by YouGov (as found on Retail Technology Review), 40% of consumers said they would feel more comfortable purchasing from an online merchant who offers multiple payment channels. Neglecting to offer a payment option that the customer prefers, or feels comfortable with, can lead to a reduced sense of loyalty and trust, leading them to look elsewhere for alternate purchase opportunities. The more payment options businesses offer, the more likely it is that their customers will buy from them, then return again and again in the future.
Payment options play a crucial role in improving the customer experience, as well as increasing customer retention, and encouraging repeat business.
Giving customers multiple methods to pay for what they want, in a way they prefer or feel comfortable with, will help companies increase brand loyalty and conversion rates.
Investing in the tools and technology that will enhance the checkout process by providing flexible payment methods over multiple channels can significantly improve business revenue.