Alternative Payments Continue to Grow
According to Javelin Research alternative payment methods accounted for $33 billion in internet purchases in 2009. This was a increase of 50% from 2008. Alternative payments now account for about 16% of online payments.
Javelin predicts that alternative payments will account for $40 billion in online sales in 2010. By 2014, alternative payments will account for $79 billion, which will account for 19% of online purchases..
Total internet sales volume was $205 billion in 2009. This was an increase over the $185 billion of 2008 online sales. Internet sales will rise to $237 billion in 2010 and almost double to $400 billion in 2014.
Card Use Declining
As the economy makes a recover, credit cards will rebound as a payment option for online purchases, but they will never again be the sole payment option offered by many merchants, as was the case a few years ago. By 2014, credit cards will account for 39% of purchases made online
Debit card payments will continue to rise and will account for 26% of online purchases by 2014. Prepaid cards will continue to gain market share with predicted volumes to reach 9% of internet purchases by 2014.
Echecks Most Popular Alternative Payment for US Shoppers
In the US, electronic checks are second only to cards for online payments. Millions of shoppers regularly purchase goods & services with echecks.
With echecks, payments are debited from buyers’ bank accounts. Funds are electronically deposited to your business bank account.
When you accept checks online, you get orders from shoppers that don’t have cards, are maxed out on cards, or who simply to prefer to pay with an echeck.
Conclusion
Alternative payment methods such as echecks increase sales. And save you money on payment processing.
Echecks processing rates are lower than cards. Sales made with electronic checks result in higher profit margins than those for paid for with a card.
You can encourage buyers to use alternative payments by offering discounts on purchases or extra loyalty points. You can also offer consumers an alternative payment method if a credit card is declined.
