Offer Buyers the Right Payment Processing Option

According to Javelin Strategy and Research, 30% of all online retail purchases will be purchased using alternative payment methods by 2013. Credit card transactions will continue to be an important part of ecommerce. However, credit cards market share is slipping as alternative payments continue to gain popularity.

Consumer and geographic payment preferences are driving the growth of alternative payments. Offering the correct alternative payment revenues and is a key element for successful penetration of international targeted markets.

Merchants need to evaluate which payments options are used most frequently by consumers in each country where product is being sold. That best payment types to offer are the ones that buyers already recognize and trust.

Merchants immediately establish credibility when buyers can chose their preferred payment method at checkout. For example, in Germany direct bank debits are the most popular payment type. In Europe and throughout much of the rest of the world, local bank transfers are popular and should be included as a payment option.

In China, 93% of the population uses direct debit as a payment method. Credit card use is very low. Buyers in China and many other countries in the world do not want to go into debt to make a purchase. Paying by direct debit is the same as paying by cash for these consumers. Merchants who do not offer direct debit in China simply will not succeed.

Mobile payments are all the rage in the news. Mobile payments are very much a niche market limited to merchants selling low ticket digital goods. Digital merchants absolutely should offer mobile payments. But, until the mobile carriers reduce fees charged for mobile commerce, higher ticket items are not a good fit for mobile billing merchants selling.

However, mobile phones will be used as electronic wallets. Direct debit, credit cards and other payment instruments are already being linked to mobile phones. Emerging markets do not have a payment processing infrastructure in place, yet, everyone has a mobile phone.