With six-months of uncertainty and instability due to the Coronavirus under our belts, there does not seem to be a light at the end of the tunnel. At least, not yet. The changes that have ensued, with mandatory closings and social distancing, has predictably impacted brick and mortar businesses. Those that did survive have moved strategically online. Consumers, terrified of infection, have demanded contactless payments.
Something that was not expected was, not the consumers’ desire for contactless payments via a contactless card or mobile wallet, but a completely new payment channel.
When PayPal and PYMNTS collaborated on a consumer survey, the primary driver that motivated a consumer to choose one retailer over another was the “availability and acceptance” of the payment methods they preferred.
What was discovered was that consumers were more often choosing BNPL (Buy Now Pay Later) options. Given the reality that the COVID-19 pandemic has forced more than 50 million Americans to file for unemployment, this doesn’t seem surprising.
Since consumers’ financial situation has changed so dramatically, it is only fair that their expectations for payment change as well. That is why, as merchants, it will be necessary to offer payment options where consumers feel like they are more in control of their spending. Here are four payment methods you should look into integrating this 2020 Holiday Season:
- PayPal’s Pay in 4: A trusted name worldwide, PayPal is offering its account holders pay for items from $30 to $600, interest-free over a period of six-weeks. Merchants will receive the funds up-front. They are only required to pay the PayPal standard rate. Another plus is that PayPal is assuming all the risk associated with payment-acceptance.
- Afterpay: This Australian-based startup has exploded as one of the best names on the BNPL stage, just in the last 24 months. With no credit checks and instant approval, they too offer payment in four installments, interest-free.
- Klarna: The Stockholm-based online payments firm, dubbed “top fintech unicorn”, also features a BNPL, with interest-free financing on retail purchases over a period of installments. How it works is that Klarna will pay a merchant as soon as a customer purchases an item on its platform. The customer is then invoiced over installments.
- Apple Pay: Apple users, as a demographic, are known to spend three times more per transaction. This demographic is also likely to buy items that are considered “non-essential” like luxury gifts.
Apple Pay has solidified itself as a secure and efficient payment method among its users. Consumers simply keep their credit card information with Apple. The merchant is able to receive all pertinent information to process the transaction.
Consumers are not required to use their iPhones to complete their purchases, as Apple Pay can be used on Macs. If merchants choose Apple Pay, there are no additional charges. They are only responsible for the credit card rates. The only requirement for merchants is that they need a shopping cart that supports Apple Pay.
Propel Your Sales This Holiday Season
As digital shopping becomes more habitual, merchants must provide customers with a smooth, secure, and flexible shopping experience. This in itself will build trust and sales during these difficult, economically challenging, and uncertain times.