Why offering multiple payments options is critical
Consumer preferences shape business. For merchants navigating customer expectations, offering a range of payment options can significantly impact success.
From enhancing customer satisfaction to expanding market reach, offering a range of payment options is now essential for any merchant aiming to succeed.
Boost Buy Now Pay Later
Buy Now Pay Later (BNPL) payments are expected to account for nearly a quarter of all global eCommerce transactions by 2026. While many consumers are careful about how they spend their money, Gen Z and millennials are favouring the use of BNPL providers when shopping. Further research forecasts that 59% of Gen Z and 53% of Millennials will make a BNPL payment in 2026, compared to 41% of Gen X and 24% of Baby Boomers.
Instalment payment plans aren’t new (furniture retailers, for example, have offered their customers to pay off large purchases in instalments for decades). Still, for merchants offering high-priced products, payment providers need to include BNPL solutions in their payment portfolio to accommodate the needs of these merchants. The selection of local payment types for a merchant will depend on the countries their customers are from and the merchant’s industry.
Prepare for a new era for digital wallets
To increase sales, merchants must align their services with the constantly changing customer behaviour in the digital landscape. An important part of this involves offering digital wallets to enable a seamless payment experience.
Digital wallets are quickly becoming the leading payment method globally, due to the ease of use for consumers. The number of digital payments in the UK in 2020 accounted for 27% of all UK transactions.
Considering the growing popularity of digital wallets alongside the use of mobile devices to shop, convenience is likely to win out. Therefore, merchants must ensure digital wallet payments are available on their checkout pages to avoid falling behind in an increasingly competitive market.
We can’t cancel credit cards
Ignoring the payment preferences across generations is a risk merchants can’t afford to take.
All customers seek seamless checkouts, but their priorities and preferences differ. While the majority of Gen Z and millennials embrace new payment methods, this contrasts with Baby Boomers, 39% of whom lack the skills to use newer technologies. And 76% of boomers prefer to pay with credit cards, compared to 53% of Gen Z. Boomers have a significant amount of disposable income, therefore accepting credit cards is essential for merchants targeting this demographic.
Adaptability is key
When striving to drive sales conversions, the ability to adapt is integral. Different markets have unique payment preferences and for merchants to meet this need, they must provide a variety of different solutions depending on their target region. An example is Elo, a major domestic credit and debit card scheme in Brazil. emerchantpay’s Global Payments Outlook highlights that Elo recorded a market share of 18% in 2020. The same report highlights that Pix, an instant payment method owned by the Central Bank of Brazil, has been used by 114 million Brazilians since its launch in 2020.
It is important for merchants to do their research and to determine the preferred local payment methods in each country to ensure that they offer them to their customers. Moreover, it is crucial to work with a payment partner that has a presence in the merchant’s target markets to leverage their strategic advisory insights and to ensure their payment strategy is set up for success.
Alexander Berrai is the deputy chief executive officer at emerchantpay