Top 3 mistakes merchants make when choosing payment methods
While creating a customer avatar, you analyze a wide range of factors: media your client surfs in, the goals he pursues and the pain points he tries to refrain from. Preferable payment methods, however, are often omitted. That’s, unfortunately, decreases the sales volumes and nips the business success in the bud. Keep scrolling to avoid the three common mistakes merchants make when choosing payment methods.
How choosing the right payment method affects sales?
First and foremost, choosing the right payment methods increases the chances of conversion. And that’s, for sure, the primary goal of any business. “Wow! That’s easy!” is the best thought that could ever come to the client’s head when he enters your payment page. A study by Forrester revealed that 72% of consumers would leave a poorly designed mobile website for one that makes purchasing easier. And two-thirds of all smartphone users prefer brands that provide a personalized shopping experience.
Not only the design and CTA button matter. The payment methods you offer are crucial, as well. Let’s say, Chinese millennial decides to buy your product. He uses AliPay since he was 15. Now, he only finds Visa or MasterCard at your website. The risk of cart abandonment rises up immediately. Keep in mind that the range of competitors is, literally, unlimited. Finding the site which offers a familiar and trusted payment method takes no longer than a few seconds.
What factors to consider when choosing payment methods for your audience?
To avoid the cart abandonment on the final phase, consider the following factors:
Understanding your target audience GEO is a must. That’s the primary goal you research way back before creating the website. Think of it as the language your clients speak. Targeting French clients with Russian copies doesn’t matter how good they are is pointless. The same is fair for offering them RBK money or PayAnyWay options. That’s the language they have no clue about.
The clients’ age plays a crucial role in choosing the right payment methods. Thankfully, we have enough data to breathe out freely. Millennials as well as generation Z (those born from 1997 to early 2000s] prefer to pay via mobile. Thus, if selling video games/clothing/gadgets, make sure to offer such an option. The older generation prefers to pay via card.
How to reach out to millennials and generation Z?
Millennials and Generation Z teens won’t bother to dig their wallets out. These young adults are comfortable with paying via mobiles. Sixty-five percent of millennials have now paid for specific products or services via mobiles, compared to 42 percent of the general population. They also enjoy in-app payments. Instant and effortless money transfer is what they appreciate most.
How to reach out to generation X?
Gen X consumers were born between 1965-1980. Unlikely those born in the late 90s, they remain conservative. They prefer to pay via credit or debit cards. Being smart-shoppers, they also take care of their security and express concerns towards instant payments.
What businesses need a recurring billing?
Recurring billing is a great option to benefit your sales. However, not all businesses need it. The best way to figure out whether your company needs one is to think of your product nature. Do people buy it once, or they tend to order it regularly? For example, media, e-learning, and NUTRA businesses require recurring billing to success. The same is fair for gaming, gambling, and adult. Avia tickets and antique stores, on the contrary, do not demand such an option.
What businesses need alternative payment methods?
Different products demand different payment methods. If you run gambling, CBD or adult, including bitcoin/litecoin/x is a must. The users of such services prefer to pay anonymously. Alternative payment methods give them such an option.
Three mistakes merchants make when choosing the payment methods
Here is a list of the three most common mistakes that put your sales at a risk:
Offering inappropriate payment methods.
If your target GEO wasn’t defined appropriately, you are more than likely to provide the wrong payment methods. If you already offer Visa and MasterCard, think of adding local payment methods. Check out payment methods in Asia and payment methods in Europe to learn more.
Providing unnecessary payment options.
In the era of capitalism, we worship the more, the better rule. However, it is not always true. You don’t need to offer all the payment methods possible for success. Not only it is time-consuming for clients, but it is also expensive for merchants.
Missing out mobile banking.
Do not underestimate mobile banking. According to the research, 48% of digital sales globally were made via phones in 2017. It is forecasted to exceed 70% by 2022, which is equal to $4.6 trillion. To better understand the trends of mobile banking and use them properly for your specific business case, see the Ultimate Guide To Mobile Payments.
At Ikajo, we offer more than 150+ payment methods in 150+ countries. Fill in the application, and we will provide you with an individual payment solution. What other topics are you interested in? Leave a comment below, and we will cover the question for you.