With the number of people moving to online shopping, many digital payment solutions have come into play. As a result, online merchants need additional methods to receive payments for their products or services.
The online payment market is competitive and is constantly evolving. According to the study, 94% of consumers in the Asia Pacific will consider using APMs in 2022.
Nowadays, there are many payment methods that allow consumers the convenience they need to purchase things online, especially those out-of-the-box options like digital wallets and cryptocurrency. Keep reading to learn more about alternative payment methods and what makes APMs appealing to merchants.
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What Are Alternative Payment Methods?
Alternative payment methods, also known as APMs, differ from traditional credit and debit card transactions. They work by providing different payment methods, such as mobile wallets, bank transfers, cryptocurrencies, etc. For example, Solidgate is a fintech company that provides payment processing services and creates a smooth payment experience for your clients. You can integrate the service quickly and receive multiple payment methods for your company.
What Makes Alternative Payment Solutions Appealing to Merchants?
Undoubtedly, APMs are appealing to merchants because they provide an affordable payment method to sell more of their products and increase sales. If your business is expanding quickly or you want to accept different payment methods because you are selling internationally, consider using APMs.
Another benefit of alternative payment solutions is the ability to accept payments across multiple locations and currencies, which is a problem for many traditional payment methods.
Types of Alternative Payments
The APMs depend on the business owner’s customers and how they want to get paid. The most common types of alternative payment methods are the following.
Digital & Mobile Wallets
Mobile wallets are the most common type of alternative payment method. As mentioned earlier, they are quick and reliable payment methods that allow shoppers to use a mobile phone or tablet’s app to make payments. For example, Apple Pay and Google Pay are popular mobile wallets that allow customers to pay with their smartphones.
ACH & Bank Transfers
ACH (Automated Clearing House) is a network that makes direct debits from customer accounts easy and efficient. Direct debit payments may include automatic recurring transactions such as payments for utilities, cable, etc. ACH payments have lower fees than credit cards because there is no risk of chargebacks from customers who dispute transactions.
Cryptocurrency
Cryptocurrency is a digital currency that allows transactions to be verified by an intelligence system and are anonymous. Cryptocurrencies are not regulated by a government and rely solely on the free market. There are many different types of cryptocurrencies, such as Bitcoin, Litecoin, ETH, etc. Thanks to smart payment options, you can accept cryptocurrency payments for your business.
Ways to Ensure You Offer the Right APMs to Your Customers
When deciding which payment method to offer, make sure you choose one that will interest your customers and meet their needs. Some ways to ensure you’re offering the right APMs are listed below.
Take Location into Account
If you are a small business owner trying to expand globally, you may want to consider different payment methods. However, if you already have customers in the country or region your business is associated with, consider taking their local payment options for convenience.
Consider Your Line of Business
If you’re trying to expand or have plans to expand globally, you should consider a payment service that gives your customers multiple payment options. For example, PayPal is a popular payment gateway for online merchants.
When you are deciding what payment methods you should offer, you also need to consider your industry. For example, you should consider cost per transaction if it is a low-marge sale with numerous cheap goods. Even a slight increase in transaction fees can decrease profits. This way, you should offer the most cost-effective payment methods, like direct deposit.
Be Mobile
If you want to stay ahead of the digital curve, you might want to consider mobile APMs for your business. With increased mobile sales, you need a payment method that works quickly and conveniently from your customers’ handsets.
Focus on Customer Expectations
When deciding which APM to offer customers, it’s important to consider whether they will actually use your chosen method. If customers like a certain type of payment, they are more likely to come back and make future purchases with you because they will feel more comfortable buying from you again, knowing their preferred payment method is accepted.
The Bottom Line
As the digital age continues to grow, more and more people are going to shop online. However, they will have a multitude of options as far as payment methods are concerned. With the help of alternative payment methods, you can get customers worldwide to use your services.
There’s a lot to consider when deciding which APM will work for you, such as the kind of products you sell, what country your business is associated with, and whether your line of business has local knowledge and expectations. Whatever you choose to offer customers will ultimately affect your business’s success in a positive way or not.
