The way people do business is changing. Think about how much has changed since the rise of online shopping. At the turn of the century, most businesses didn’t even have websites. Now, companies are considered behind the curve if they lack fully integrated online stores.
These changes have affected everything from customer behaviour to the way people pay for goods and services. Cash is no longer the dominant payment method. Instead, customers opt to complete transactions using credit and debit cards. But even these solutions aren’t permanent.
A new approach has emerged that threatens to change the way consumers interact with businesses.
Alternative payment methods are growing in popularity. There are quite a few reasons for their growth, but the following statistics should help clarify the issue. With this information in mind, forward-thinking businesspeople should definitely consider adopting these approaches before their competitors do.
1. Forty Percent of Consumers Hold Less Than $20 in Cash at Any Given Time
Every physical retailer accepts cash, but it still isn’t terribly convenient. It’s easy to lose, and people often feel uncomfortable carrying large amounts around. This may account for its decline in recent years.
According to Bankrate, 40 percent of survey respondents said they carry less than $20 on average. A further 29 percent said they carry between $20 and $50, while nearly 10 percent said they don’t carry cash at all.
While the rise of e-commerce has made physical currency less necessary, it appears that its cachet is slipping for physical retailers as well.
2. Seventeen Percent of Survey Respondents Worry about Their Security Online
Credit card fraud is a major concern for online shoppers. In 2014, over 45 percent of credit card theft occurred over the internet. Fraudulent purchases can devastate consumers’ credit scores and ruin their financial well-being.
This anxiety may even cause shoppers to abandon purchases altogether. About 17 percent of survey respondents told Statista that they’ve left items in their online shopping carts because they’ve had “concerns about (the retailer’s) payment security.” This indicates that poor anti-fraud measures may put a major dent in a company’s sales.
3. Online Card Usage Has Declined by 16 Percent
Even if retailers can keep their customers safe, it may not be enough to preserve consumer confidence in credit and debit cards. In 2012, 57 percent of online shoppers used these methods to pay for their purchases. By 2017, that number is expected to fall to 41 percent, which constitutes a 16 percent decline.
Obviously, this drop isn’t precipitous enough to rule out card-based payments altogether. However, it does signal that these methods aren’t as popular as they used to be. Merchants will need to consider alternative payment methods if this trend continues, especially given the fact that…
4. About 59 Percent of E-Commerce Transactions Will Use Alternative Payments in 2017
Online shopping is not a fad. In 2015, over three-quarters of Canadians bought goods and services over the internet. Companies that ignore the power of e-commerce do so at their own peril, especially given its growth.
Alternative payment methods will play a huge role in online shopping going forward. About 59 percent of e-commerce transactions will revolve around these solutions by the end of 2017. If your online store doesn’t accommodate them, you’re bound to miss out on important sales.