In a 2008 survey, Neilson reported that 875 million people shop online. More than 85 percent of the world's online population used the Internet to make a purchase, an increase of 40% within just 2 years. Credit cards were used by 59% of internet shoppers. That means 41% of online shoppers use other payment methods.
Internet shoppers are one click away from leaving a merchant site. Offering the right choice of payment options is important because if a desired payment option is not offered, consumers will quickly exit the site.
Merchants need to provide customers the payment choices that the buyers want. Preferences vary according to credit card adoption rates, local payment options and availability of international payment alternatives.
For example, Germany is Europe’s second largest online shopping market. But credit card penetration is barely over 20%. Chinese buyers use bank issued debit cards for 95% of internet purchases, not credit cards. Even in the UK, where credit card penetration is about 85%, there is still a large market in for buyers who do not use credit cards online because of fears of security breaches.
In the US, electronic checks are the most popular alternative payment method. Millions of Americans regularly pay for goods & services online with electronic checks.
Certainly, merchants should offer credit cards for those who want to pay. But, know your market and offer the preferred regional payment options along with credit cards.
Alternative payment solutions increase sales. Any business serious about maximizing revenues will benefit from adding alternative payment methods at checkout.
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