Businesses that offer many ways to accept payments on their websites are likely to make more sales.
Joshua Shimkin, head of SME growth and marketing at digital payment platform Peach Payments, comments that offering a wide variety of different payment methods makes a real difference to every business’s bottom line. There are clear business reasons to accept many different forms of payment.
Not everyone has a credit or debit card
Although roughly 78% of South Africans have bank accounts, only around 9% (7.1 million cards in a population of 60.6 million) of South Africans had a credit card in 2020. Around 43 million debit cards are in use in South Africa, but a significant percentage of those are used purely to withdraw cash from ATMs.
Statista has found that, in South Africa, debit cards make up 33% of all online transactions and credit cards a further 17% – meaning that 50% of online shoppers need other payment methods to complete their purchases.
Not everyone is comfortable with sharing their card details online
Already, around 20% of all online payments are made via bank transfer, of which instant EFT is a subcategory. Many people are concerned about security and prefer not to share credit card details online. Instant EFT offers a way of paying that appeals to this group.
Another payment option for customers who don’t want to share their details online is 1Voucher. Customers can buy 1Vouchers at thousands of purchase points across the country and then redeem these vouchers at checkout to purchase from online merchants.
Lack of a selection of payment methods can cost you sales
Shimkin says the use of alternative multiple payment methods as a way of payment at checkout is increasing dramatically. For instance, instant EFT payment rand values on Peach Payments’ platform grew by 55.9% between October and December 2022. In the same period, the rand value processed via Buy Now, Pay Later options grew by 41%.
“This growth in the rand value of transactions processed by alternative methods highlights the need for merchants to offer consumers more choices at checkout. Having access to an alternative payment method means the sale is retained and the customer experience is improved,” Shimkin says.
Extend credit to customers without taking on the risk
Some payment options, like Mobicred, give customers almost immediate access to credit.
“We’ve found that Mobicred transaction values are typically twice that of a credit card payment, and customers make bigger purchases more often. Plus there’s no risk for the merchant – they’ll be paid in full on purchase,” Shimkin says.
Payflex, a simple-to-use Buy Now Pay Later solution, is another option. “Merchants who have offered this option to their customers have experienced a 30% lift in sales. They get paid upfront on purchase, and customers make four interest-free payments. Customers can apply in the checkout flow and get approved in minutes,” he says.
A similar Buy Now Pay Later option is ZeroPay. Customers apply for a ZeroPay account during checkout, merchants get paid on purchase and customers make three interest-free payments.
FinChoicePay is another credit option available in the checkout flow. It offers zero transaction fees for merchants (which means they save up to 5.5% of the purchase value) and gives customers access to up to R50,000 credit to be repaid over three to 12 months.
“Particularly in the current economic climate, offering customers a way to buy the items they need but may not have the immediate cash flow to afford is important,” Shimkin says.
He notes that these short-term credit options are particularly useful to customers who may not have access to other forms of credit, but need to make large annual purchases, such as school clothes and stationery.
Cater for different markets
Preferred payment methods differ from country to country. In South Africa, for instance, people tend to pay using credit cards, debit cards or instant EFT. In Kenya, Mpesa is more widely used and in the global market PayPal is a favourite among consumers, Shimkin says.
Another international favourite is ApplePay, designed for mobile-first ecommerce. It makes it very easy for Apple customers to make once-off or recurring payments and offers advanced security measures, including biometrics and tokenised card information.
“Entrepreneurs should deploy a wide variety of payment methods, so there’s always a way for their customers to pay, and for their businesses to grow,” he concludes.