Consumers are accustomed to being instantly connected — to information, to entertainment, to one another via text message and social media, and to items they want to buy. With this expectation that nearly every need can be immediately solved with the help of technology, it’s not wonder that they’ve become so privy to online payments — and the businesses that accept them.
Here’s a look at the top reasons people prefer online payments:
1) They eliminate geographical boundaries. When a person travels to a different country or continent, they have to adapt what’s in their wallet. This may include exchanging currency, and even using a different credit card than they would typically use. Online payments eliminate the obstacles to participating in a global marketplace.
Many payment processors equip businesses to accept a range of different currencies, automatically calculate the proper exchange rate based on the type of currency — and even adapt the language and information prompted in checkout forms to accommodate the different languages buyers might speak, based on the currency used.
2) They’ve never been more convenient. Payment technology has evolved to the point that consumers can complete an online payment even if they don’t have a card or physical wallet on hand. In addition to the increasing popularity of mobile wallets, like Apple Pay, research by Javelin Strategy indicates that simpler forms of alternative funding (think PayPal or BillMeLater) remain well received by online consumers. In fact, more than 80 percent of respondents to Javelin’s study said they’d used one of these card-free payment tools in the last year to make an online payment.
3) They give consumers more time. Online payments aren’t just convenient in the sense of transaction speed — they eliminate the need for consumers to travel to a store, invest their time, and wait in line to pay. Studies on the psychological impact of waiting in line reveal just how precious time is to consumers: They tend to overestimate how much waiting will deplete their time by nearly 40 percent. Whether the amount of time a customer loses from waiting in line is real or imagined, perception is reality: Online payments deliver a tangible benefit, simply by offering the buyer a choice of how to spend their time.
4) They provide an additional layer of purchase protection. Buying from a small business, whether in person or online, requires that customers establish some degree of trust with a merchant with whom they may have no previous experience. Regardless of how clearly a business communicates its return, exchange, and customer satisfaction policies, there may be a sense of hesitancy for consumers. Online payments can overcome this obstacle. When online payments are made using a credit card that guarantees the lowest price for a stated number of days, extends manufacturer warranties, and offers a cardholder the right to dispute a purchase, for example, the customer has peace of mind that they will be protected, regardless of the merchant’s policy.
5) They replicate their existing financial habits. Online banking has become a tool that more than half of Americans rely on to transfer funds, pay bills, and track their budgets, according to Pew Research Center. Online payments replicate the financial habits and behaviors that have become the “new normal” for so many consumers.
6) They provide cost-free benefits. In addition to all of the benefits customers can gain from online payments, they cost consumers nothing in return. In a world where so few things are free, online payments offer consumers a value-added convenience, with no additional investment required. Though businesses may incur a small fee for accepting credit cards, the fact that consumers are given the option to pay in the means they prefer will likely negate the nominal fee that’s involved in the transaction.
Online payments give consumers the hassle-free experience they want at no cost —and plenty of timesaving benefits. In tandem, they provide small businesses that accept them with the operational efficiencies they need to meet (and hopefully exceed) customer expectations.
Do you prefer online payments to physical transactions?