As with many other aspects of running a business, managing payment methods can be tricky. Maintaining the status quo and ignoring new payment methods could mean losing customers and relevance, whereas, hurriedly implementing every new solution could lead to a clunky customer experience and wasted resources.
The goal for savvy business owners is to find a balance — create a strategy that enables them to smartly decide which payment method to adopt and when. A good place to start when creating this strategy is realizing that emerging payment methods are gaining ground.
According to Statista, transactions from mobile wallets represented the largest share of the total e-commerce transaction volume in 2021 (49%), and this is expected to rise to 53% by 2025. Buy Now, Pay Later is also expected to garner more attention. BNPL accounted for just 3% of global e-commerce transactions in 2021 but will likely see that rise to 5% by 2025.
While it’s true that new-age pay methods are becoming more popular, this is not enough justification to arbitrarily implement every new payment channel. Let’s find out other factors to consider when determining whether a payment method is worth adding to your stack and if now is the right time.
Clarify Your Objectives
The first step is to define your business objectives for adding a new payment method. Do you want to increase sales, improve customer satisfaction, or expand into new markets? Understanding your business objectives will help you to evaluate which payment method is the best fit for your needs.
When evaluating a new payment method, there are several factors to consider, such as transaction costs, security, user experience, and international payment support. Understanding the business objective helps to prioritize these factors and determine which is most important for your business at that time.
For instance, if your objective is to expand into new markets, how well the payment method supports international payments will be very crucial in your decision-making process.
Consider User Experience
Finally, you'll want to consider the user experience. Adding too many payment options can be overwhelming for customers and may actually hurt conversion rates. You want to find a balance between offering enough payment methods to meet customer demand, while keeping the checkout process simple and streamlined.
Also, the payment process associated with the payment channels being considered should be smooth and user-friendly. If the payment process is complicated, customers may abandon their purchase, which can result in lost sales. Therefore, it is important to offer payment methods that are simple and easy to use. Ensure that the payment gateway is responsive, and the payment process is seamless.
Evaluate the Value of the Payment Method with a Scorecard
A scorecard is a tool that you can use to assess and compare the performance of different payment methods against specific criteria. The criteria on the scorecard should be chosen based on your business objectives, as well as the needs and preferences of its customers.
Some common criteria that businesses may consider when creating a scorecard to evaluate payment methods include:
- Cost: The cost of implementing and maintaining the payment method, including setup fees, transaction fees, and ongoing maintenance costs.
- Ease of integration: The ease with which the payment method can be integrated into the business's existing payment system and processes.
- Security and fraud protection: The level of security and fraud protection offered by the payment method to ensure that the business and its customers' sensitive information is kept safe.
- Technical support: The quality and availability of technical support for the payment method to ensure that any issues are resolved quickly and effectively.
- Legal and regulatory compliance: The payment method's compliance with all relevant legal and regulatory requirements to ensure that the business is not exposed to legal or financial risks.
The Work Doesn’t Stop There
Even after determining that an alternative payment method is right for your business right now, you also need to evaluate alternative payment method providers. This is because choosing the wrong provider could create issues with the implementation of the payment method and undermine your efforts to improve customer experience or achieve any other business objective via that new addition.
So ensure your selected provider ticks boxes such as extensive technical capabilities, a solid reputation within the industry, excellent customer support, stellar regulatory compliance, and affordable pricing. We prioritize all this and more at Bloc.
At bloc, we’ve built a robust payments orchestration engine that allows businesses like yours to finally make a better case for cost/reliability benefits when integrating single providers.
With Bloc’s Payment Providers service, you can;
- Set up and accept multiple payment providers and methods for your business.
- Set up rules for auto-switching how they are delivered.
- Toggle on and off providers easily,
- Increase the reliability of your systems.
- Save engineering time,
- Optimize your reconciliations and other operations processes for speed.
- Eliminate payment provider downtimes and other issues and makes sure you never miss a sales opportunity again.
Start building robust and customer-centred payment experiences with bloc.