Customers value choice—and that extends to their payment options. Whether they are shopping online, in a physical store or on the go, people want to be able to choose how they pay. That means that you, as the merchant, need to offer your customers more than one choice when it comes to payments.
But there are many alternative payment options on the market today. How do you evaluate them in order to decide what is right for your business?
Different Methods, Different Metrics
The first thing to understand about alternative payment options is that they use different metrics to measure their success. That can make it difficult to do a side-by-side comparison of any two methods. Since they are measuring different things, it can be difficult to tell which of them is really benefitting your business.
Some of the common claims attached to alternative payment methods include things like lowering fees, increasing average order value and increasing sales volume. If you try to compare a method that claims to offer you lower merchant fees and a method that claims to increase your sales volume, it can be difficult to tell which is really helping your business.
Pick a Metric, Any Metric
Perhaps the best thing to do when you try to decide on alternative payment methods for your business is to select a metric that aligns with your business goals. While many businesses have multiple goals—and many of them will align with the metrics payment processing providers are using—you may place more importance on increasing your sales volumes than lowering your operating expenses.
In that case, you are going to want to investigate methods of payment that claim to increase sales, rather than those that claim to lower your merchant fees. Of course, if you can get a 2-for-1 deal and get a method that meets multiple goals, that’s even better.
Check for Reviews
Sometimes, the best place to get information is not from the payment providers themselves. Many organizations make many claims, but those claims may be based less on fact and more on biased information. After all, not every provider can offer you the lowest merchant fees around, but there are probably plenty of providers that will claim their fees are absolute rock bottom.
Check out third-party reviews from neutral sources, such as business magazines, industry publications, or newspapers. A quick Internet search can help you find both providers that garner favourable reviews and providers that do not rate quite so well. If you can find a few “top ten” lists, compare them. Is there a provider that consistently makes the cut as one of the best?
Talk to Others Using the Service
You may know people who are already using the alternative payment method you’re most interested in. Talk to them about the service they are receiving, and ask if they feel they have gotten what the provider claimed they would. If the provider says its alternative payment method will increase sales, did this other merchant notice an increase in sales directly attributable to the payment method?
If it is possible, talk to more than one person about different payment methods and providers. Chances are you will get anecdotal evidence, which, while useful, is problematic if you only ask one person: If they had a bad experience, they can only tell you that, even if the service or provider does well on average.
Look at Fees
While reducing your fees may not be the metric you picked to evaluate your alternative payment options, you still need to pay attention to it. There is a good reason why: High fees can cannibalize any increase in sales or average order value you see.
Check out any potential providers’ fee structures, and be sure you understand how much you will be charged. Signing up with a provider that offers a better fee structure is always a better option.