While most US consumers prefer paying for online purchases with a credit or debit card, research shows that many are now starting to explore alternative payment methods at checkout.
While in the past, the idea of ‘alternative’ methods may have scared some shoppers away, these days the huge (and growing) choice of secure and convenient options is redefining the mainstream – and encouraging consumers to try something new. For instance, mobile ‘order and pay’ apps in quick-serve restaurants are becoming popular and showing no signs of slowing down any time soon.
Let’s explore some of the other key emerging trends in US consumer payment options, and consider how your business could potentially benefit.
Changing consumers trends
Over the next 5 years, the use of cash at point of sale is expected to decline by around 5%. It’s predicted most of this spend will move to eWallets – whose share of POS payments is likely to more than double by 2022.
‘Buy now, pay later’ is becoming an increasingly popular way to remove common barriers to purchase during those critical ‘Buy Now’ moments . According to a recent survey, 45% of digital consumers say financing options would influence their purchase decisions – especially among Gen Z-ers.
Payment by interest-free installments is also on the rise. Over a third (35%) of US shoppers are now more likely to buy something online when given interest-free monthly payment options. In addition,
almost half (47%) of online shoppers say a zero interest payment option is the most important factor when picking an installment plan. And 67% of shoppers are more likely to splurge on bigger ticket items if they can pay monthly.
Layaway are slightly different to credit cards and regular installments because the item being purchased stays in the store until the buyer has finished paying. They’re a popular option for many US internet users, with 13% of them planning to opt for free layaways when holiday shopping.
A few things to bear in mind
- Finding a finance partner takes time
Before offering your shoppers a ‘pay later’ option, you’ll need to source a payment vendor ready to handle the movement of money between you and your customers. Using a vendor is a safe and reliable way to help you manage payments, plus they can help you navigate local regulations or laws you may not be familiar with.
It’s vital you check any potential partner’s financials and business practices, so you’ll need to ensure you and/or your team are ready to put the hours in and feel informed enough to make a decision.
- Mindsets may need changing
Most payment options will require you and your customers to provide a significant amount of information – before, during and after the purchase. You need to be prepared for this as a business, and be sure your customers are willing to not only trust you and your payment partner, but also be sufficiently motivated to spend the extra time at point of purchase.
- Give customers what they want
Many people avoid shopping online because they’re worried about fraud or inflexible payment options. With the improved security and convenience, alternative payment solutions like installments and layaways are well placed for strong growth in the coming years .
All kinds of businesses use the internet to reach new audiences and valuable revenue streams. But taking that first step to becoming a global player can be as exciting as it is daunting.
If you’re interested in expanding internationally, Market Finder website is a useful place to start. You’ll find details of all the main payment options available, guidance on secure payment strategies, plus everything you need to ensure your global plans are a success wherever you’re headed next.