4 Benefits of Diversifying Payment Options for Business (Guest Contribution from Keith Coppersmith)

The following post comes to us from Keith Coppersmith, an experienced business consultant who serves small businesses and startups. Learn more about Keith in his bio following this article.

During the pandemic, the percentage of shoppers whose most monthly payments are attributed to ecommerce grew from 24% to 47%. With this rise in popularity of online shopping, the need for diversification of payment options also grew.

The pandemic also brought financial instability to many shoppers, changing their purchasing habits and preferred payment methods. If you want to attract customers and keep them coming back under these new circumstances, you need to adapt and offer multiple payment methods.

Diversifying your payment options can be beneficial not only for your customers but also for your business. Here’s why.

Expanding your Customer Base

As online shopping is getting more and more popular, businesses can now reach a larger customer base and target not only local areas but the entire country or even conquer international markets.

However, not everyone’s online shopping habits are the same. These differences are the most visible between generations. Older generations prefer more traditional forms of payment, while younger generations are more tech-savvy and more inclined to use digital wallets such as Google Pay, Apple Pay, and PayPay. Credit and debit cards are popular with Gen X, while Millennials and Gen Z prefer to use prepaid cards.

Focusing on only a few payment methods can isolate a complete generation of buyers and limit your customer base. That’s why it’s important to diversify your payment methods and offer various options that will fit every generation of shoppers.

Opening to New Markets

As mentioned before, taking your business online can give you the opportunity to reach international customers. However, opening up to new markets may add some new payment requirements.

Each country uses different payment methods and has different regulations. For example, while remotely created checks work perfectly fine in the US, the rest of the world simply doesn’t really use this payment method. On the other hand, many European countries such as the Netherlands, Belgium, Sweden, and Norway, use bank transfers, which aren’t that popular in the US.

It’s essential to keep all these factors in mind and introduce multiple payment options to avoid alienating your international customers. By offering as many payment methods as possible, you can make international payments seamless and attract customers all over the world.

Taking Advantage of Cryptocurrencies

As new technologies are arising, some shoppers are completely abandoning traditional payment methods. Cryptocurrencies are getting increasingly popular and businesses should recognize this trend and get on board with it.

The cryptocurrency mining hardware market is expected to grow by $ 2.80 billion from 2020 to 2024. And while there’s still no urgency to start accepting cryptocurrencies yet, realizing their potential early on can help you gain competitive advantage further down the line.

With more and more people investing in bitcoin mining hardware, adding crypto to the list of your payment methods can help your business reach a broader customer base as well as allow your buyers to remain anonymous and protect their privacy while shopping online.

Making Checkout Process Easier

With everything at the tip of their fingers and increasingly shorter attention spans, today’s customers have very little patience for tedious checkout processes. Most customers have a preferred method of payment and it’s usually the one that’s the most straightforward. If their preferred payment method is not available, they might abandon your cart right away.

Even if they don’t initially get put off by the disfavoured payment method, if the checkout process turns out to be too complicated, 21% of customers are likely to abandon their shopping cart.

If you make your checkout process fast and convenient, your customers will be more likely to follow through with their purchase. Additionally, they’ll also be more inclined to making impulse purchases, leaving you with more conversions and higher profit.

Which payment methods you can provide

Now that you know why you should diversify your payment methods let’s see some of the options you should provide.

  • Credit or debit cards – Most sites already accept credit or debit cards, but make sure that you accept cards issued by various different companies.
  • eChecks – It might sound strange, but it’s possible to accept checks online.
  • PayPal – It’s a fast and convenient way to let your consumers pay for their online purchases.
  • Apple and Google Pay – Adding Google Pay and Apple Pay as a payment option will give your customers yet another fast and easy way to check out sooner.
  • Cryptocurrencies – While cryptocurrencies are still picking up and just starting to gain popularity, adding them as a payment method will put you ahead of the curve and help you reach customers who are already using cryptocurrencies.

Over to you

Offering a wide variety of payment methods is more important than you might think. It allows you to expand your customer base and reach new markets. It also allows you to gain a competitive advantage by adopting new technological trends early in the game. Most importantly, it keeps your customers happy and conversion rates high.

How many payment methods do you already offer? Join in the conversation by leaving a comment below.

About the Author: Keith Coppersmith is an Adelaide based business consultant with a degree in Media Management. With experience in numerous small businesses and startups, he enjoys giving advice on all things marketing.

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