How Integrating Relevant Payment Methods Can Increase Conversions to Payments on Your Website and Online Store

I think it’s no secret that the limited number of payment methods is one of the main reasons why customers abandon the cart and do not checkout on the site. For all the time with various projects (both CIS and foreign), I have gained some experience in interacting with payment services, which I would like to share in this blog.

In this article, we will talk about the need to have a variety of yet relevant payment methods on your website or online store.

As more consumers shop online today, the lack of suitable payment methods 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 surely turn to are popular payment solutions, depending on which market you are launching into. Among Russian services, they often consider Yukassa or Robokassa, as well as acquiring modules from Sberbank, Tinkoff and other banks. When launching projects on foreign markets, they primarily turn to Stripe and Paypal.

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 basically any payment method that does not work on the global network of card systems such as Visa and Mastercard. These include payment methods that work through online banking transfers, digital wallets, QR codes, or even cryptocurrencies.

Customers generally prefer one or two payment methods, so it is important to understand that the best approach to accepting payments is not to offer as many payment methods as possible, but to offer exactly the right methods.

With the rise of online fraud and changing digital shopping habits, alternative payment methods are becoming more popular and will account for a significant share of all global e-commerce payments in 2023.

Consumer demand for alternatives is growing: due to the covid pandemic, for example an increasing number of buyers prefer to buy using the “buy now, pay later” (BNPL) option, a method that allows consumers to pay for an order in installments of 3-4 payments.

I will briefly talk about popular alternative payment methods.

Buy now, pay later or pay in instalments

Thanks to companies such as Klarna, Affirm and Afterpay, the “buy now, pay later” service is gaining popularity around the world. With the help of such services, consumers can purchase goods, and then distribute their cost over several months without interest and 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, making this payment method risk-free for the merchant. According to Klarna, BNPL increases conversions by 44% and helps build longer lasting customer relationships. With apps like Affirm and Klarna, people have more choice and freedom to buy what they want, when they want, resulting in more purchases.

Similar services also exist on the Russian market, for example, the Shares service from Tinkoff.

Electronic wallets

Electronic wallets are “digital wallets” that can be used instead of cards for online shopping, 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 merchants integrated into the Google ecosystem. The same can be said about Apple Pay, which uses NFC technology and provides 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.

All of these solutions allow consumers to pay without leaving their ecosystem of choice, resulting in higher conversions and therefore higher sales.

Local payment solutions

In addition to the listed payment solutions, you should also keep 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 a 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 a mobile payment system from Kaspi.kzwith 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 shocks in the financial sector in 2022. Many international payment services (Wise, Paypal, etc.) began to refuse service to citizens of the Russian Federation, which led to serious difficulties in accepting and making cross-border payments.

Those who were previously very far from the crypt had to simply register on Binance. Over 17 million Russiansor about 12% of the entire population, own cryptocurrencies, according to Singapore-based payment gateway tripleA.

There are several ways to receive payments in cryptocurrency: transfer to the address of the crypto wallet, payment by QR code, development of your own payment module and connection of crypto processing. The last method is the most convenient and functional for business. Both in the CIS and foreign markets, there are many companies providing crypto acquiring services. Among the connection methods, as a rule, they offer integration using modules for popular CMS or via API.

Accepting payments in cryptocurrency is not only a solution for attracting a foreign audience, but also helps to increase the conversion of the site by providing an additional payment method that is gaining popularity in Russia as well.

Why it’s Important to Take Your 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 mobile payments and appreciate the convenience of the payment method.

The Baymard Institute held study on the reasons for refusal to purchase during the ordering process. Complicated checkout process and insufficient number of payment methods were named among the top ten reasons. As we can see, offering the most popular payment methods helps increase conversions.

Also, as we said above, it’s important to focus on offering relevant payment methods, not as many 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 monitor the effectiveness of each of them. All of them must be tested and tried to determine which one is the most beneficial, safe and convenient for the client.

A couple of words in conclusion

Offering customers the right payment methods may not seem like such a big deal, but the data shows that offering the right payment methods increases conversions, makes better use of advertising budgets, and increases the bottom line of a project.

Thank you for your attention. This is my first article, so I will be glad to receive feedback 🙂

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