You have heard the term before: “alternative payment methods.” It gets tossed around a lot when you’re talking to potential merchant services providers about their payment processing solutions. But the concept can seem vague or fuzzy. Even after you’ve spoken with a provider and asked questions, you may not be sure what you need to know about alternative payment methods—or even what they are.
What Are They?
Sometimes it’s best to start with the basics. So what exactly is an alternative payment method? In most cases, people mean anything and everything except cash. This includes credit card payments, debit card payments, wire transfers, reward point redemptions, and everything in between.
Occasionally, when people use the term, they mean everything except credit card payments. Why? Because the preferred method of payment has shifted over time. Not too long ago, virtually everyone used cash. Now, however, credit card payments have become more common, so much so that almost every other method of payment could be considered an “alternative.”
Why Do You Want Them?
One of the reasons businesses choose to partner with merchant services providers is that they want to process alternative payments. Some businesses have managed to operate as cash-only this long, but in order to keep up with customer demand, they need to adopt credit card and debit card payments.
Online stores have also given rise to the need for businesses to accept alternative payment methods. Clearly, it’s a little difficult to pay in cash over the internet. Businesses conducting online transactions need alternatives. Credit cards are usually the most popular, but some online stores offer their customers multiple methods, including debit card payments and more.
Why Do You Need Them?
Wanting to offer you customers alternative payments is one thing; needing to offer those options is another. And more and more, offering multiple methods of payment is no longer an option for businesses—it is necessity.
Consumers all but demand organizations offer them more than one way to pay. If, for example, a customer cannot pay with their preferred credit cards or by debit in a store, they’re not very likely to come back. They’ll simply take their business elsewhere, to a store that does accept their preferred forms of payment.
hat means that companies need to offer multiple methods of payment. It encourages customers to do business with them time and time again, to make bigger purchases, and even to recommend the brand to friends and family.
Not Every Business Offers Them
It’s fairly clear that offering multiple payment methods is a good thing for businesses. So why is it that not every business offers multiple methods of payment?
The answer is cost. Credit cards are infamous for coming with a complicated web of fees, and in some cases, merchants will find those fees too high. Payment methods that cost the merchant obviously cut into the bottom line, which is why some firms have resisted alternative payment methods.
How Can You Offer Them?
You know you need to offer alternative payment methods in order to attract and retain customers. You know it will give you a leg up on the competition, but you’re also worried that the fees will bite into your bottom line and make your business unprofitable. What can you do?
There is an easy solution: Find a great payment processing provider, and work with the provider to find the right solution for your business. Not every plan needs to be structured in the exact same way, just as not every business is the exact same. Working with a provider will help you offer your customers more while also ensuring that you get the best deal possible.