I think it's no secret that a limited number of payment methods is one of the main reasons why customers abandon their cart and do not pay on the site. During all my time with various projects (both CIS and foreign), I have accumulated some experience in interacting with payment services, which I would like to share in this blog.
In this article, we’ll talk about the need to have diverse yet relevant payment methods on your website or online store.
As more consumers shop online today, a lack of suitable payment options can seriously impact conversion rates. In the modern era, the final effectiveness of the sales funnel greatly depends on the chosen payment methods.
When launching your project, the first thing you will probably do is turn to popular payment solutions, depending on the market you are launching into. Among Russian services, YuKassa or Robokassa are often considered, as well as acquiring modules from Sberbank, Tinkoff and other banks. When launching projects in foreign markets, they first turn to Stripe and Paypal; in addition, 2Checkout, Square, Braintree, Authorize.net, etc. are often considered.
Yes, of course, the first step is to connect the most popular solution, but do not forget that consumer preferences change over time and alternative payment methods are gaining relevance.
Development of alternative payment methods
An alternative payment method is essentially any payment method that does not work on the global network of card systems such as Visa and Mastercard. This could include payment methods that work through online bank transfers, digital wallets, QR codes or even cryptocurrencies.Customers generally prefer one or two payment methods, so it's important to understand that the best approach to accepting payments is not to offer as many payment methods as possible, but to offer just the right ones.
Consumer demand for alternative options is growing: for example, due to the Covid pandemic, an increasing number of consumers are choosing to buy using the buy now pay later (BNPL) option - a method that allows consumers to pay for their order in 3-4 installments.
I’ll briefly talk about popular alternative payment methods.
Buy now, pay later or pay in installments
Thanks to companies like Klarna, Affirm and Afterpay, buy now pay later services are gaining popularity around the world. With the help of such services, consumers can purchase goods and then spread their cost over several months without interest or hidden fees. They can also defer payment for 30 days, which gives the buyer more time to pay for the item.BNPL providers take on some risk, which makes this payment method risk-free for the merchant. According to Klarna, BNPL increases conversions by 44% and helps build longer customer relationships. Thanks to apps like Affirm and Klarna, people have more choice and freedom to buy what they want when they want, leading to more purchases.
There are also similar services on the Russian market, for example, the “Shares” service from Tinkoff.
Electronic wallets
E-wallets are “digital wallets” that can be used instead of cards for online purchases, money transfers and other purposes. Examples include Google Pay, Amazon Pay, Apple Pay and Paypal.Google Pay is a popular payment method mainly among Android device owners. The tool is useful for sellers integrated into the Google ecosystem. The same can be said for Apple Pay, which uses NFC technology and enables instant transactions. Amazon Pay allows users to pay directly from their Amazon account.
The listed solutions are relevant for the foreign market. Among users from Russia, such wallets as Qiwi, Webmoney, YuMoney, VK Pay are common. Popular solutions also include Payeer, AdvCash, Perfect Money, Capitalist, Wallet One and other services that are online banks.
All of these solutions allow consumers to pay without leaving their preferred ecosystem, resulting in higher conversions and hence increased sales.
Local payment solutions
In addition to the payment solutions listed, it is also worth keeping in mind that in certain GEOs, local solutions are the most common.For example, in Germany, contactless payments are on the rise thanks to Girocard, a payment system based on online banking that allows contactless payments.
This system is similar to the iDeal system in the Netherlands, which allows customers to make P2P transactions from their banks and provides convenient checkout. In Asian countries, offering AliPay or WeChat Pay is a must to serve local customers.
In Kazakhstan, for example, the Kaspi Pay service is very developed - this is a mobile POS and mobile payment system from Kaspi.kz, with the help of which individual entrepreneurs can accept payments from Kaspi Gold via Kaspi QR.
When choosing a market to launch sales, it is necessary to take into account the payment preferences of local users.
Cryptocurrency solutions
Cryptocurrency as a method of payment and acceptance of payments is gaining more and more popularity every year. For Russians, this method has become more relevant due to turmoil in the financial sector in 2022. Many international payment services (Wise, Paypal, etc.) began to refuse services to citizens of the Russian Federation, which led to serious difficulties in accepting and making cross-border payments.There are several ways to accept payments in cryptocurrency: transfer to a crypto wallet address, payment using a QR code, developing your own payment module and connecting crypto processing. The last method is the most convenient and functional for business. There are many companies providing crypto acquiring services both in the CIS and foreign markets. Among the connection methods, they usually offer integration using modules for popular CMS or via API.
When looking for the optimal service that provides crypto processing services, you can often come across Coinbase, Bitpay, CryptoCloud, Triple A, B2BinPay, Coingate.
Accepting payments in cryptocurrency is not only a solution for attracting foreign audiences, but also helps increase website conversion by providing an additional payment method that is gaining popularity in Russia, among others.
Why is it important to take payment solutions seriously?
Buyers want to be able to choose the payment method that suits them best. Moreover, more and more people are switching to paying from mobile devices and appreciating the convenience of the payment method.Also, as we said above, it's important to focus on offering relevant payment methods rather than as many of them as possible. This means that e-commerce companies first need to research the most popular payment solutions in the market or country they are targeting.
After connecting the selected payment methods, it is important to conduct analytics and track the effectiveness of each of them. All of them must be tested and tried to determine which one is most beneficial, safe and convenient for the client.
A few words in conclusion
Offering clients the right payment methods may not seem like a big deal, but data shows that offering the right payment options increases conversions, allows for more efficient use of advertising budgets, and improves a project's bottom line.Thank you for your attention. This is my first article, so I will be glad to receive feedback
