Alternative payment methods aren’t so different from avant-garde works of art by unknown creators – think Banksy, Jackson Pollock and Andy Warhol before they became famous. At one time, the art world viewed these creators as awkward and strange. Now, prestigious museums fight to display their iconic images.
Like art dealers snubbing their noses at a floor-to-ceiling Pollock, merchants used to balk at credit cards until they became a necessary part of doing business. Now, we treat new payment technologies the same way. We’re slow to adopt them until they become a part of the mainstream.
As ecommerce entrepreneurs, how do we recognize the next PayPal, and how do we know when it’s time to build this new fintech into our payment systems?
How Fintech Is Changing Electronic Payment
Fintech is a portmanteau of “financial technology.” In the last 20 years, the definition of fintech has broadened to include any technological innovations in the ways people transact business, including cryptocurrency and cybersecurity.
It’s not your job to predict which payment methods will be popular in the future. You just need to recognize the ones that will increase your profits now – and be flexible enough to use them.
Here are some non-credit-card payment options that you might want to stay open to. These methods have already gained considerable traction with consumers and ecommerce businesses around the world:
PayPal and its Competitors: PayPal and its many competitors – like Amazon Pay and Google Pay – allow your customers to make online purchases without inputting credit card data, security codes and address information. This process makes smartphone purchases simpler and bypasses the problem of mistyping credit card information, which can result in rejected payments. Some consumers also feel more secure using PayPal because they don’t have to give your website their credit card information.
Online banking transfer services: Some fintechs allow customers to make secure transfers of money directly from their bank accounts to your vender account. The WorldPay Global Payment Report claims that these fintechs are gaining traction as online banking and mobile banking services become more popular.
Mobile digital wallets: Mobile digital wallets are smartphone applications that connect to a consumer’s credit card. This fintech provides a layer of security between the merchant and the credit card. It also allows for easy, instant transactions whether the customer is making a purchase online or in person.
Instant financing solutions: Applying for a credit card requires consumers to fill out time-consuming forms, which is difficult on a smartphone. Instant financing, also known as point-of-sale financing, bypasses this hassle by requiring only a minimum of details from your customer who can get instant approval for a small loan at the time of purchase.
Try before you buy: One of the drawbacks of online shopping is that you can’t try on clothing or accessories before you make the purchase. “Try before you buy” lets you order the items that spark your interest, try them on at home, return the ones you don’t want and pay for the ones you keep. This method eliminates the fear of buyers’ remorse that prevents many shoppers from completing their online purchases.
“Cash-in” systems: Cash-in systems allow consumers to buy an account that functions similarly to a credit card with a cash payment. In exchange for a $40 or $100 payment, for example, the purchaser receives a prepaid credit card that works for online purchases.
Cryptocurrency payment systems: Bitcoin, Litecoin, Ripple and other cryptocurrency payment systems offer endless possibilities. This emerging fintech can provide any person with internet access the ability to send instant and secure digital payments to merchants throughout the world.
Before Andy Warhol made it big, he was just another avant-garde creator. New fintech is often relegated to the same kind of obscurity – until it benefits from mainstream adoption. When we stay open to new payment options, we won’t miss out on profitable opportunities as soon as they arise.
References:
https://www.investopedia.com/terms/f/fintech.asp
https://worldpaymentsreport.com/
https://www.investopedia.com/personal-finance/top-mobile-wallets/
https://alisterpaine.com/2018/10/15/why-companies-should-consider-third-party-pos-financing/
http://www.paymentsjournal.com/alternative-payment-methods-are-taking-over-global-online-businesses/
