What are APM’s and why is it getting popular?
Alternative payment methods refer to any method of paying for products or services other than cash or major credit card schemes (Visa, MasterCard, American Express).
Customers now have more options than it has ever been when it comes to how they pay, and this is especially true online. Customers want their preferred form of payment to be available, so businesses can offer various options.
Many customers and businesses are familiar with the following alternative payment methods:
PayPal is one of the most well-known alternative payment systems among customers and merchants.
Apple Pay is a service that allows you to make payments using their platform.
Few more are- Alipay, Stripe, Klarna, PaySafeCard.
Why is it so popular?
Users want the method of making a purchase to be as seamless as possible. Unexpected fees, being required to create an account, or being asked to fill out extensive applications are all reasons why a user may opt not to finish a sale. However, because most customers only use one or two payment methods, they may leave their cart if their preferred option is not available, even if the rest of the check is completed.
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Alternative payment methods, on the other hand, are frequently more mainstream than niche. They are the de facto method of payment in many nations, notably online. For example, 57 percent of German buyers prefer to use PayPal while shopping online. Meanwhile, in the Netherlands, iDEAL, a local bank transfer payment, accounts for 60% of all online purchases. This is considerably more critical for SaaS.
Alternative payment methods come in a variety of forms.
Electronic cash or e-cash (cash-based payments): Customers choose a cash-based payment option and produce a barcode or unique reference number to identify their payment while checking out online.
Bank transfers in real time: Consumers can pay for goods and services online via direct internet transfers from their bank accounts utilising this payment option. This payment technique is exemplified by iDEAL and Sofort.
Direct Debit: For recurring payments, direct debit is widely utilised. Consumers agree to allow a business to withdraw payments straight from their bank account in exchange for a certain service.
Domestic card schemes: Domestic card schemes work in a similar way to Visa and Mastercard’s worldwide card schemes. These cards, on the other hand, will only be accepted in a select market.
E-wallets (electronic wallets) are a computerised means to store money. Customers load funds into their e-wallets via bank transfer, card, or cash, and then use them to make payments online, offline, and in some situations, person-to-person and cross-border. PayPal and Alipay are two examples of e-cash methods.
Why should you consider it?
Alternative payment options must be an important component of your payment strategy.
Customers prefer what they are familiar with. Why would someone do something different to shop with you if they generally pay in a certain way? Why introduce extra payment friction and difficulty when ease is so important in closing sales?
Allow them to pay their own way, no matter where they are.
Not all payment processors are capable of doing so. As a result, make sure you’re working with a company that can provide you with the international coverage you require, as well as the flexibility to adapt and evolve as your company grows.