How can alternative payment methods help your business grow internationally?

The number of online payments is growing every year. That said, credit card penetration remains very uneven. In countries like Israel or Canada, the rate exceeds 74%, while in Bangladesh, it remains at around 1% (source: Statista). Such numbers show that introducing alternative payment methods is not just an option but a must if you are interested in global business expansion.

In this article, we’ll look into different types of alternative payment methods and their advantages for businesses.

What are alternative payment methods?

Alternative payment methods refer to ways of completing transactions that don’t involve traditional banking systems or credit card payments. They are designed to offer flexibility, security, and convenience, addressing various barriers that might prevent potential customers from completing purchases.

Types of alternative payment methods

There is a wide range of payment methods that cater to different customer preferences.

• Digital wallets
  Digital wallets like PayPal, Alipay and Neosurf allow users to store their payment information on their devices or online platforms for easy access. These wallets offer a quick and secure way to make payments online and in physical stores, eliminating the need for carrying physical cards or cash. They are particularly popular for their convenience and the added security features, such as encryption and tokenization, which protect users’ financial information.

• Bank transfers
  Bank transfers involve directly moving funds from the customer’s bank account to the merchant’s account. This method is widely used for its security and reliability, especially for large transactions. Services like SEPA in Europe facilitate cross-border bank transfers, making them more accessible and cost-effective for international transactions.

• Cryptocurrency
  Cryptocurrencies such as Bitcoin, Ethereum, and Ripple are another alternative to traditional payment methods. These digital currencies provide anonymity and lower transaction fees, appealing to users who prioritise privacy or those in countries with less stable currencies. Cryptocurrencies offer a unique opportunity for businesses to attract tech-savvy consumers.

• Prepaid cards
  Prepaid cards are payment cards that are loaded with funds in advance. Unlike credit cards, they do not require a bank account, making them accessible to a broader range of customers, including those in the unbanked regions. Prepaid cards are popular both for online and in-store purchases.

• Cash-based payments
  This category includes payment solutions that allow customers to make cash payments for online purchases at local convenience stores or via kiosk networks. For businesses, offering cash-based payment options can capture a market segment that prefers or has to rely exclusively on cash transactions. One such example is Latin America, where many regions are still unbanked, and methods like OXXO and SafetyPay are extremely popular.
• Buy now, pay later
  Buy now, pay later is a flexible payment option that allows consumers to purchase goods immediately and pay for them over time in instalments, interest-free. This method can encourage consumers to make purchases they might otherwise defer, increasing average order values for businesses.

Advantages of adopting alternative payment methods

According to numerous studies, about one-tenth of buyers will not complete a purchase on the site if they don’t find the desired payment method at checkout. This is one of the aspects alternative payment methods can help you solve. Let’s see what other advantages they can bring to your business:

• Broader market reach: By accommodating local payment preferences, companies can attract customers who may not have access to traditional payment methods, thereby expanding their market reach.
• Higher conversion rates: The availability of preferred payment methods can significantly reduce cart abandonment rates, positively impacting sales.
• Cost-effectiveness: Many alternative payment methods offer lower transaction fees compared to traditional bank transfers and credit card payments, reducing operational costs.
• Enhanced customer experience: Providing a familiar and secure payment experience reduces friction in the checkout process, leading to higher satisfaction and repeat purchases.
• Better security: Advanced security features of many alternative payment methods, such as two-factor authentication, can enhance consumer trust in your business.

Over 300 alternative payment methods with Payop

Alternative methods are becoming increasingly popular, leading to the emergence of new options on the market. With Payop, you don’t have to worry about keeping track of this development, choosing the most popular methods for your audience and integrating them. We do all of this and much more.

Payop offers a selection of over 300 alternative payment methods, which our team is constantly researching and updating due to their growing popularity. You can connect all the relevant methods in one integration within a single contract and forget about tons of paperwork and research. Plus, this applies not only to the currently available methods but also to all the future methods we add to our system.

Sign up with us and stop losing your customers.

You can learn more at payop.com or by contacting us at [email protected].