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Cash, card or crypto – which payment method is the best?

The right payment method plays an important role in making the sales process as smooth as possible for the customer, says DPO PayGate.

In a traditional bricks-and-mortar store, the customer walks up to the counter with their item and pays with their preferred payment method. The choice is theirs and it is up to the retailer to ensure that they have a credit card machine or enough loose change. When it comes to online shopping, however, the e-tailer has some significant advantages – no queues, plenty of payment options, and a quick and easy checkout.

But, if the online store doesn’t ensure that the sales process is as smooth as possible, customers quickly abandon their carts and go somewhere else. It’s not as easy for them to walk out of a physical store. As an online retailer, you need to ensure that your customers have access to payment options that inspire confidence in you and your business, and you need to figure out which payment options are the right ones to offer your customers.

Here are five simple steps to payment options that enhance customer convenience:

1. The customer is key

You need to pay careful attention to the people that you would like to attract to your online store. Different demographics affect customer online behaviour so ignoring payment preferences could mean the difference between growing a business or losing out as they can be one of the biggest differentiators for your online store.

If, for example, you are selling big ticket items like furniture or appliances, you could offer your customers an alternative payment method like mobicred. By making it possible for shoppers to purchase items with a credit facility will prevent them from shying away from a larger upfront cost on a bigger item.

2. Cash still counts

In South Africa, significant strides towards financial inclusion have not changed the fact that there is still a large informal sector that relies on cash. More than 90% of this market is cash-based and around 40% of the local workforce is paid in cash. Don’t dismiss cash as a solid choice for your business, other companies such as Jumia and Uber have paid attention to this need and it has paid off.

And don’t think you need to physically collect cash. A payment method, like SCode, will allow your customers to buy into e-commerce by letting them pay for the items they want to order from your online shop in cash at thousands of retail outlets.

3. Cards are the dominant payment method

While cash is still king, cards have become the leader in the payment option game. Credit and debit cards account for around 38% of payments offline and 41% online. However, their influence is seasonal. Towards the end of the year, people have money in their cheque accounts and tend to opt into secure, instant EFT or debit card payments while in the leaner months they use their credit cards.

Instant EFT is definitely growing in popularity as it helps users to deftly dodge the need to constantly enter bank account details and making mistakes. It also helps them to manage their cash better – they can only spend what they have in their account – and it neatly fills in the gap left behind by app payments such as SnapScan or Zapper. Credit cards are in the top position of payment methods with 25%, followed by bank transfers at 20%.

What’s interesting is that mobile payment solutions such as eWallets are also gaining ground. They currently command 17% of online payments, coming in at third place ahead of debit cards at 16%. There are more than 80 million mobile subscribers in South Africa and the sheer weight and size of these numbers should inspire you to consider mobile payment options for your store. As solutions like Zapper and SnapScan continue to grow in popularity, they will cement the simplicity and accessibility of mobile payment options and add value to your customer experience.

4. The future may yet be virtual

Virtual currencies have a future, but it is still undefined and most payment service providers are monitoring them for now. Offering these virtual currencies as a payment option goes back to knowing who your customer is and the type of payment method they would use. For most businesses, online shoppers aren’t using virtual currencies, but some may be drawn to this method, especially if the audience is very technical.

The reality is that integrating these currencies into the payment process is complex and right now the lack of customer volume isn’t worth the hard work.  Keep an eye on virtual currency, sure, but focus for now on the payment solutions that make sense to your market.

5. A variety of options to offer

Factoring in the huge variety of payment solutions and options on offer can be daunting for many businesses, no matter how big or small they may be.

However, the best way forward through the choices and options is to offer as many payment options as you can. If your customers can use the payment methods they like, they will keep coming back for more. If you are accessible, easy and reliable, they will enjoy their shopping experience and return to your store.

The last word

To ensure that you select the right payment options and have a rich bouquet on offer, work with a payment gateway that supports a variety of card, app, and Instant EFT choices.

This takes away the pain of having to integrate multiple options into your business and ensures that you remain on the right side of payment regulation and legislation. It’s hard enough capturing customer attention without limiting their choices when it comes to payment – that’s simply bad for business.

DPO PayGate is a proud Partner of the NSBC.

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