The advantages of providing multiple payment options
Friday 08 May 2009
TAGS: eCommerce | Payment methods
Research suggest that online retailers could be missing out on £’000s in lost sales and revenue by not offering enough choice when it comes to payment methods. John Ryder takes a look at the research and offers his advice.
Two pieces of individual research stood out of the crowd for me over the last couple of weeks and I wanted to share them here in the silvertongue. Both pieces of research highlight the same issue and although one source is a US survey, it shouldn’t be ignored.
Here are the stats…
- 75% of online shoppers have used an alternative payment method when shopping online.
- 54% have actually looked for different payment options when making a purchase.
- 59% said they would be more likely to buy online if Google Checkout, PayPal or other alternative payment methods were available. [Source: Trialpay, May 2008]
- In a survey of 2,000 online shoppers, 9% of respondents ‘strongly agreed’ that they would feel more comfortable purchasing from an online retailer who offers a wide range of payment methods than a retailer who only offers one payment option. 31% of respondents ‘agreed’.
- Only 14% ‘disagreed’ with the same comment and 4% ‘strongly disagreed’.
- 42% of respondents ‘neither agreed or disagreed’ with the statement. [Source: YouGov Survey, May 2009]
Yes, one could argue that the questions in the YouGov Survey are a little loaded; but when considered side by side with the Trialpay research I feel that there is enough there to take notice.
The stats suggest that not only are online shoppers willing to use alternative payment methods; there is also a significant proportion of them who would be more comfortable and more likely to complete a purchase when presented with multiple options.
Why is that?
Online shoppers are limiting their credit card use and relying more and more on alternative ways to pay. This is putting demand on alternative payment methods.
Reluctance to use credit cards online could be down to consumer confidence and the perception of increased fraud.
Thanks to eBay (and it’s own recent efforts to extend reach) PayPal can be considered as a major factor in influencing consumer’s awareness of alternative payment options. And let’s not forget Google Checkout of course!
How should online retailers respond?
Simply put, online retailers need to offer as many payment methods as possible. PayPal and Google Checkout are the obvious contenders and are both readily accessible to merchants and consumers.
As always, we’ll be carrying out some testing at Silverbean and report our findings on the Silver Tongue.
John Ryder is the Commercial Director at Silverbean. If you have any questions or would like to discuss how Silverbean can help you achieve your marketing objectives through good usability; please contact our resident usability consultant using one of the following.