Online Retailers Adopt More Alternative Payment Methods
Major online retailers are leading the way in adopting alternative payment methods. A recent study by Brulant points out that out of 100 major online retailers, 30 percent offer alternative payment methods to credit cards. Brulant reports on some of its alternative payment findings:
“One of the most surprising findings is the increase in retailers offering all three alternative payment methods,” says Brulant principal Adam Cohen, noting that none of the same retailers offered all three methods in February 2007. “Today we find 5% adoption of all three at a variety of retailers from Toys ‘R Us to PetSmart to Rite Aid. This reinforces the ‘customer is king’ mentality, as retailers begin to offer a multitude of choices for checkout.”
This is further indication that ecommerce shoppers want the ability to limit how many ecommerce Web sites get their personal information. It also emphasizes the increasing customer focus in online shopping on increased options.
The study did not address the Amazon “Pay Now” widget, instead focusing on the more popular options: PayPal, Google Checkout and Bill Me Later. These three services are making inroads, it appears, and it may be difficult for Amazon, a late-comer to the alternative payment game, to catch up. Adding the “Pay Now” widget to your ecommerce site, in addition to the three other major alternative payment methods won’t hurt, though. Ecommerce Trends points out that alternative payment is becoming a consideration, along with product choices:
“As online shopping continues to grow, it is critical to not only expand your product assortment,” but to also offer “alternative means of payment,” says Marty Keane, senior vice president of e-commerce at Bluefly an online retailer.
Tags: alternative payment, Amazon pay now widget, Bill Me Later, eCommerce, ecommerce shoppers, ecommerce Web sites, Google Checkout, PayPal
Posted by Miranda | February 6, 2008
Jestep February 6th, 2008
I think bill me later is a great service that really matches up with a lot of buying processes, especially for higher-ticket sales.
However, their minimum processing volume is far out of reach for the majority of website owners. 20M per year, last I checked, in online sales is the minimum for them to consider a website for their service. That’s a lot more than most ecommerce sites will ever make in a year.
I think that a website doing 500K - 1M+ could really benefit from bill me later. Looking at the 2007 Internet Retailer Top 500, there are only 297 websites that do 20M in business.
pwb February 6th, 2008
PayPal offers a similar service, Pay Later, and can accept more merchants:
http://www.paypal-promo.com/paypalpaylater/merchant/
jd February 6th, 2008
“This is further indication that ecommerce shoppers want the ability to limit how many ecommerce Web sites get their personal information.”
Well, with Bill Me Later, they actually give out more personal information.
James Creare February 11th, 2008
I find this article very interesting.
As a web designer myself, I am very protective of my credit card details. I buy all my dvds and cds from play.com because I trust their online payment system, even though it is a simple credit card system.
Surely online shoppers don’t want to be put off with lots of different logos, and payment options, As an online shopper myself I just like submitting my simple credit card details, knowing they are a trusted company. What do you guys think?
Miranda February 11th, 2008
Jestep, you make a good point about Bill Me Later. The point of these third-party payment options, JD, is that the information goes to limited places. While more info is given out initially, only Bill Me Later has it, and you can shop at a wide variety of places without having to enter the information in again and again for each site. It, along with Google Checkout, PayPal and Amazon Pay Now actually help you limit how many sites actually see your information.
James makes a good point. If you stick only to a very few sites, that you trust, third-party options become less important to you. You have an account, and you stick with the same sites. If you change which sites you go to, and want to limit who sees your personal information, the third-party payment methods become more important.
Emily July 16th, 2008
So we all know that alternative payments on a merchant’s site will lead to revenue lift. We also know that, while they do it, consumers are apprehensive about sharing credit card information. I recently researched this, and found more payment options available to online merchants. There’s the obvious PayPal, Bill Me Later, Google Checkout. One interesting alternative I came across is bill to phone. Like these other alternatives, bill to phone helps to make the checkout process of online buying faster, more convenient, and more secure for digital content subscribers and online merchants. It also helps to enhance the security because it does not require the buyer’s credit card number, so there is no need to expose personal information and risk fraud. We know it’s a lot safer to expose your phone number than your credit card number.
The company I came across that provides phone billing merchant services is ILD payments. Here’s the website – ildtelecom.com