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Online payments and conversion rates

March 17 2017

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What is the link between online payments and conversion rates? The economy is more global in scope than ever, nowhere more so than the realm of e-commerce, which allows someone from one part of the planet to buy an item from another part. But in order to make the most use of international markets, you need to understand local markets, and take into account things like local production, shopping habits, distribution routes, payment methods and currencies.

Alternative Payment Methods (APMs) are any form of payment that doesn’t include card payments. APMs have increased in popularity for online payments, and there are several hundred different methods. Platforms such as PayPal or Google Wallet can be used for this purpose. The diversity of payment methods and activities involved in online payments, and their popularity in different locations, makes the strategic use of online payments important for turning payment methods into conversions, and reaching out to those users who would become customers if their preferred method of payment was easily available.

Here, then, are three pieces of advice for increasing your reach:

  1. Know your target demographic: what types of devices they use and what payment methods do they prefer, depending on where in the world they are and the industry you’re in.
  2. What are the top three payment methods of your target? Most customers will use at least one of those top three, and gives customers a range of options if they prefer a particular payment method over others.
  3. Analyze the use of payment method and accompanying conversion rate, and change it if it is not working. This process will be easier if you have a global payment network, offer rapid payment switches, and provide access to comprehensive payment data for advanced analytics.

 

There are also tools which you can make use of to determine which payment method to be offered to customers based on their pre-determined risk level. One example is payment by invoice, a high-risk payment method where customers can pay for goods or services at a later date. This method is popular in places like Germany, and allows you to try goods before you buy them, giving customers the opportunity to change their order before they make a commitment. This information can be vital for knowing which methods customers want over and above card payments.