There are numerous payment choices available on the web including PayPal, Visa, MasterCard MasterPass, Google Wallet, Visa V.me to name just a few. There has also been an increase in additional payment alternatives as mobile purchases are beginning to disrupt traditional payment methods.
Each alternative payment provider says that their method of payment helps to increase conversion rates. Recent studies have indicated that this is indeed true! Alternative payment systems do tend to increase conversion rates, particularly from mobile users.
Nevertheless, prior to implementing your alternative payment systems, there are some important matters you must consider.
Many choices exist; PayPal is a rather obvious choice, since it has such a broad customer base with more than 100 million accounts, which is more than any of its competitors. Approximately 35% of consumers that engage in online shopping have PayPal accounts.
Nevertheless PayPal has its issues. Since it grew as the primary payment gateway for eBay, it has not always had a positive reputation. Many consumers have had issues with PayPal payments having had problems with smaller eBay merchants. In fact, about 60% of people that have PayPal accounts say their preferred method of payment is a major credit card.
Ecommerce sites that sell higher priced or luxury merchandise should probably consider alternatives to PayPal due to the problems with its reputation. A payment method that has grown quickly, is Google Wallet, since the Android mobile OS has grown so quickly and a Wallet account is needed to utilise the Google Play store. It is also possible to link Google Wallet to Google Plus sign on.
The MasterCard MasterPass system and Visa V.me have great potential but the services for both of them are fairly new and they are evolving. These services are being rolled out through bank acquisitions. This is resulting in a payment choice proliferation that leads to shopper confusion and increased complexity. This can be witnessed already when MasterPass is used. When you choose to buy with MasterPass you may say multiple MasterPass wallets from which to choose.
Selecting your payment method may be difficult, so many people use several of them in an attempt to appeal to more customers. This approach might be valid, but before doing this, give it some careful consideration.
When multiple payment systems are offered, it can create calls-to-action that compete with each other. When site visitors are confronted with numerous choices, they tend to become indecisive. The problem is that multiple payment options can create calls-to-action that compete.
Prior to implementing multiple payment systems think about how you will go about addressing this issue. One possibility is to suppress alternate methods of payment for returning customers. For example, if they paid with a credit card in the past, you can suppress other payment methods. On the other hand, if the customer has used PayPal in the past, display that option most prominently.
Many sites will not experience an increased conversion rate when they implement multiple payment options. The primary reason is that their implementations are done poorly. A key benefit to these payment systems is that they allow purchasers to bypass, the shipping, billing, and credit card number entry procedures. This is of particular importance for mobile users, since entering all this information on a smartphone tends to discourage many users.
Nevertheless, a lot of websites have an implementation of payment methods that are only designed as a credit card alternative. Quite often, users are required to enter billing and shipping information prior to being given access to a PayPal button. This type of implementation may be easier than providing multiple checkout paths, but it won’t help with conversions, and you will see this occur frequently in sites that use PayPal.
The proper way to handle this is to have your alternative payment as a button at the beginning of your checkout procedure. The summary page on a shopping cart is a good place for it.
There is no doubt that multiple payment options have the potential to increase conversions. Nevertheless, to have efficacy, they must be properly implemented, by providing users with an alternative checkout process, not just a credit card payment alternative. To implement this will take extra effort, but it will prove beneficial. It is better just to have one well implemented method of payment than to do a poor job implementing multiple methods of payment. This is particularly important for mobile users, where your goal should be to minimise user data entry as much as you can. Alternate payments are very effective for this purpose. As mobile users and commerce continue to grow, alternate payment methods will become increasingly important for all online merchants.