Over the past several years, the main method of consumer payments was cash, check, or debit/credit cards. However, the payment industry as of late has been shifting direction, opening the door for alternative payment methods. Below are several reasons why merchants should consider accepting these new alternative payment options and how they benefit their business in the long haul:
According to Scratch/Viacom, 68% of Millennials who were surveyed expect that in five years from now, people will access money entirely different than in the past. Furthermore, 50% of Millennials feel that people will no longer heavily rely on traditional methods of payment, such as cash, checks, or cards.
In order to accommodate these changes, merchants will need to offer additional alternative payments for consumers. By just embracing a single alternative payment method, merchants could open their business to an even larger audience driving more sales to the business.
"Consumers are starting to look for different options they can trust," said Adam Cohen, principal of Brulant's consumer products and retail practice. As a result, alternative payment companies reach out to consumers who may not own a credit card, do not trust sharing personal information via the Internet, or are looking for a simpler check out experience.
Many people are now converting their method of payments to alternative payments, such as mobile devices or digital wallets, not only for accessibility purposes but also for security measures. One recent study done by Brulant, an online marketing firm, discovered that “30 percent of the top 100 retailers offered a form of alternative payment.”
Younger generations in particular are a target market, as they are more accepting of alternative payments instead of traditional methods – they want to use what is fastest, most current, and most useful for them. In turn, with technology advancing to benefit the convenience of the consumer, most customers are now making their purchases digitally. By adapting to newer alternative methods of payments, merchants could see a larger pool of customers, thus leading to more sales.
When it comes to security, both consumers and merchant’s want to keep their financial information safe and protected to prevent fraud from occurring. In fact, 66% of consumers mentioned they would contemplate using mobile or contactless card payments often as long as the alternative payment method was secure. Unlike debit/credit cards transactions, many alternative payment options incorporate added security features to protect the merchant and consumer from fraud. With the addition of accepting alternative payments, merchants could decrease their chances of fraud, as alternative payments could be a more secure payment option.
The future of transactions is certainly changing direction, gearing more towards alternative payment methods. By adapting to consumers wants and needs for payment processing, merchants can boost their business by increasing sales, retaining more customers, and providing customers the security and protection they need by implementing alternative payment methods.