Consumers Want More Ways to Pay
There is a growing trend in e-commerce that no one saw coming. It’s not likely connected to the pandemic as much as consumers feeling more empowered than ever to call the shots around the way they purchase – online and brick and mortar. You may have seen some of these new payment options in your online holiday shopping adventures, but these were not temporary incentives for Black Friday – these new ways to pay are here to stay.
There are 3 major trends worth looking out for right now.
One is mobile payment. Products like Venmo, and newcomer CashApp, have been used for friend-to-friend payments to cover lunch dates and miniature golf outings, but they are now a large part of how small businesses collect from their customers. So, if you’re at the salon or need to pay for your pool service, don’t be surprised if they ask you to Venmo them the money. And while this frictionless method is convenient, the IRS is now asking the app companies to report any payments over $600. And that’s why you won’t be asked for a mobile quick pay for larger ticket items.
While PayPal has fallen out of fashion for many younger buyers, it still processed 15.4 billion transactions in 2020, a staggering number. But it’s not enough to drop a PayPal button on your website and call it a day. People want more options. An alternative – or, better yet, addition – to this approach, is Amazon Pay. Why ask for name, address and credit card number when someone could simply use their Amazon.com account information right on your site. Apple Pay is another great option.
But more than ever, people want to buy today but not pay today. In the ultimate exercise of instant gratification, solutions like AfterPay allow users to defer a portion of their payment of an item for a later time. There is an algorithm that helps discern if a buyer is worthy of extending an immediate-term loan, but, once approved, a $100 purchase today could turn into four equal payments of $25 over an 8-week period. There are some minor complications when it comes to returns, but when your competition makes this offer, it’s something you should probably consider strongly.