Alyssa Williams is a finance expert and a freelance writer from Los Angeles, California.
Adapting to the changes and delivering in need of the hour will keep you competitive in the market. As a retail owner providing different payment options is pivotal in retaining existing customers and attracting new ones. We will discuss different payment options and their benefits.
An Online Shift
According to supermarket news, the US has seen a 40% surge in online grocery sales this year. During lockdowns, the essential services had to operate by keeping in mind the safety of individuals. Limited options made the owners think differently and adopt online business. People in quarantine and lockdowns could purchase online and get the bare necessities delivered at their doorsteps.
Business operations transformed faster, which would have taken at least five more years if we hadn’t encountered the pandemic. Digitalization has helped business owners to widen the geographics to market their products and attract a much larger customer base. Most of these changes are going to stay here for a long time.
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Different Payment Methods in the Retail Market
Before we understand the online payment methods, let me take you through the other payment methods in the market. We need to find out which payment method is best for your business.
The traditional method is not going away any time soon. Many customers still opt to pay by cash. Customers rely on cash payment when they don't have enough funds in their bank or make a casual visit to the store. You don’t need to pay any fees to accept cash.
Payment by checks is a less used method by customers in the present time. However, some customers still prefer checks for big purchases as it is safer than cash transactions. Checks are safer to keep in the store, and you don't need to pay any fees to a third party.
Debit or Credit Card
A convenient and common payment method is used among consumers. A credit card lets customers purchase even on days out of cash. For some, it's a part of managing their finance which makes them highly rely on stores that accept credit cards.
International credit and debit cards also help non-citizens purchase when they are on business or leisure in foreign lands.
Pandemic has left a lot of citizens to depend on the government for bare essentials. Governments worldwide have used prepaid cards to distribute social benefits like child support and unemployment benefits. There are a large number of unbanked populations who benefit from prepaid cards.
Online Payment Methods
Customers like to make payments on the go, and they will remember the experience of hassle-free transactions and bring them back to your store for more purchases. According to a study, almost 40% of the fund transfer in the retail market in the year 2021 was made through digital wallets and other online payment methods. Meaning 40% of the customers prefer to make online payments, and that's a big chunk of the market share to leave out.
Digital wallets or e-wallets are software-based apps or website that lets you add money from your bank online and transfer funds to the receiver. Once the bank is linked to the e-wallets, consumers can also pay by scanning a unique QR code designated to the receiver’s wallet.
Cryptocurrency is a digital payment method you might want to consider as a mode of payment in contemporary times. BitPay is one company that enables businesses to accept cryptocurrencies as payment.
E-wallets popular in the US are PayPal, Google Pay, Apple Pay, Neteller, Samsung Pay, etc.
Advantages And Disadvantages of different payment methods
• One of the most common payment methods. • Easiest form of payment. • No transaction fees.
• Inconvenience in making big purchases. • Insecure for storing in office or home. • Always a hassle to keep change at the counter. • Time-consuming for counting money.
• Convenient and secure for large purchases. • No need to keep change at the counter. • No transaction fees.
• Labor and time consuming for depositing in the bank. • Risk of fake checks or check bounce in case of insufficient funds in customers account.
Debit, Credit or Prepaid cards.
• Convenient and safer for customers to make big purchases. • No need to keep change at the counter. • No risk of bad checks or fake cash. • Allows foreign travelers to make purchase easily.
• Usually takes one to three days for processing. • Need to pay small transaction fees to third-party credit card companies. • Need to rent or purchase a point of sale(POS) device.
• Convenient and secure for large purchases. • Easy mode of transaction. • No need to keep change at the store. • No risk of bad checks or fake cash. • No need of a dedicated device. • Allows foreign travelers to make purchases easily.
• Fund transfer might not happen due to server issues. • Time consuming for refunds to process. • Some e-wallets might charge a transaction fee. • In case of customer dispute the charges might be reversed.
Incorporating different payment methods will open up your business to customers of different age groups. People will always choose to do business that facilitates convenient payment methods, and an online payment method is something to consider for your business to stay on top of the game.