E-commerce sites and online retailers can increase their sales by offering a selection of payment methods appropriate to their target markets, according to Robin Philip of payment services provider PayGate.
“Customers want choice,” says Philip. “Especially in emerging markets like South Africa and the rest of Africa, relatively few people have credit cards – and not all of those people are comfortable using those credit cards online. But there is a large and growing selection of alternative payment methods that makes e-commerce available to a much bigger market.”
There are literally hundreds of different alternative payment methods available around the world, says Philip, with many countries having their own particular favourites. “People want to pay using a method they trust, and what they trust varies greatly, often based on the particular history of each country and method.”
In South America, for example, one of the most popular payment methods is the Astropay pre-paid card, which consumers can use to pay in hundreds of online stores, without ever needing to reveal credit card or bank account details.
In East Africa, where mobile phones are far more common than credit cards or bank accounts, mobile payments through M-Pesa dominate the market.
In South Africa, says Philip, the picture is very diverse. “Wealthier customers are quite comfortable using their credit cards, but we’re seeing more and more use of debit cards as well. Some consumers are choosing to make direct bank transfers, through secure gateways that link directly to their internet banking accounts. Mobile payments are slowly becoming more popular as well.”
E-wallet systems like PayPal are also globally popular, with local rivals in many countries.
“The number of alternatives can be overwhelming,” says Philip, “which is why online retailers need to work closely with their payment providers to select the right mix for their target market. The reward for getting it right is that you will reach far more customers, and they will be far more likely to complete their purchases – and come back for more.”