Want to increase revenue? Follow the payments evolution
The payments landscape continually shifts to keep up with consumer preferences. As shoppers move away from cash and physical cards, payments are evolving to meet new demands for variety and convenience. If you’re not updating payment options for your customers, you could be missing an opportunity to increase revenue.
Shoppers like having more choice when it comes to how they pay for purchases. It’s not enough to just accept cash or a few credit card options these days. Offering your customers these 3 increasingly popular ways to pay can help maximize revenue for your business.
The most prevalent form of contactless payment is e-commerce, allowing shoppers to buy online without ever having to enter a brick-and-mortar store. Popularity surged with the coronavirus pandemic and is still increasing. Retail e-commerce sales are projected to grow 12% this year, making up more than 20% of all sales worldwide.
Many merchants who shifted to add e-commerce during the pandemic saw growth in revenues. Great Lakes Brewing is a great example: The brewery added e-commerce functionality in 2 days and boosted sales 15% above pre-pandemic levels.
Contactless credit and debit cards have become more common in the U.S., in part because they’re faster than swiping or inserting cards into a reader. Payment options like click-and-collect (or curbside pickup) and self-checkout kiosks are also good for customers who want to make purchases with minimal interaction.
If you’re looking to set up contactless payment options for your business, you don’t necessarily need loads of technical expertise. One first step could be to partner with one of the many e-commerce platforms like Shopify, WooCommerce, and Wix. You can also get a contactless-enabled card reader so you don’t miss a revenue-boosting opportunity from tech-savvy shoppers looking to buy from your business.
The ability to pay with a mobile phone’s touch-screen—whether online or in-store—has also gained traction with many shoppers. Mobile wallets like Apple Pay, Samsung Pay, and PayPal store a consumer’s personal finance data and process transactions digitally, in real time.
Paying with a wallet app on your phone used to be considered cutting-edge, now it’s common. Juniper Research estimates that the number of digital wallet users exceeded 2.6 billion in 2020 and will rise to over 4 billion by 2025. This provides a massive opportunity for merchants to reach consumers who may not be reached with cards.
This form of payment is most popular with younger consumers—a very attractive demographic due to the potential for long-term spending power and loyalty. A Morning Consult survey found 53% of millennials and 62% of Gen Z shoppers made purchases with mobile wallets. That includes online, in-store, or both.
Of course, there are many options for accepting mobile payments. Finding what’s right for your business may require analyzing and testing what works best for your customers. To get started, here are 11 tips on accepting mobile payments for your business.
Buy now, pay later
The flexible form of payment known as buy now, pay later (BNPL) is one of the fastest growing forms of payment in e-commerce today. By choosing to buy with a BNPL provider like Affirm, shoppers can commit to paying in biweekly or monthly installments. This option often gives them more control in managing cash flow—and it helps merchants capture more sales and revenue.
Offering a BNPL to your customers can increase conversion rates, average order value (AOV), and repeat purchases. Businesses that offer customer financing with Affirm can see 85% AOV lifts and 20% repeat purchase rates. What’s more, offering a BNPL option to shoppers can boost incremental revenue by pulling forward sales that otherwise might have been lost or delayed.
The mobile-friendly BNPL method has won over customers so much that many will avoid shopping at businesses that don’t offer this option. A recent Affirm survey found that just about half (49%) of shoppers will only buy from retailers that offer BNPL. It’s much easier to increase revenue when you can engage that large segment of potential customers!
“As the seller, you need to give your potential customers the payment choices they are looking for to make the purchase decision that much easier,” said Roslyn Lavery, Director of Partner Management at WooCommerce.
Her company’s research found revenue increased for businesses that offered more payment options. “Businesses with revenue above $1M have 4.5 payment methods enabled, compared to 3.5 for businesses with less than $1M,” she said.
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