Subscribe via RSS FeedAre alternative payment types accepted?
A growing trend among retailers is to offer alternative payment options such as PayPal, Google Checkout, and Bill Me Later. Many analysts and vendors have reported success from retailers deploying this tactic. And why shouldn’t we believe them? With a massive eBay user ecosystem, PayPal certainly has the legs to be a ubiquitous payment form. The same goes for Google. Bill Me Later adds a level of convenience by deferring payment and offering ‘instant credit’.
The results shown by Top 100 retailers tell a confusing story however. Conversion rates were convincingly higher at retailers who did not offer alternative payment types – more than double at retailers selling high ticket value items. Overall growth rates were about even for each camp, but distinct categories showed noticeable polarization – the most dramatic being apparel showing more than 2x the growth rate for those offering alternative payments. Because conversion rates are more directly attributable to tactic deployment, we feel the merits of alternative payments should be investigated further in light of the study findings.
36% of Top 100 retailers offer shoppers the chance to use an alternative payment method.
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Did you include private label credit cards in this measure? Say for a site that included a prescreening for an offer of instant credit on their store brand credit card?
As far as I recall (we did this study last year) we considered store credit cards an alternative payment option. Standard payment options were the usual suspects: Visa, Mastercard, Amex, Discover.
If we had looked at European retailers, these numbers would be WAY different I think.
Interesting article – thanks for sharing this. I came across some other interesting stats related to alternate payments. There are more than 150 million wireline phone subscribers in the US. Additionally:
· nearly 25% of the population doesn’t have a credit card, yet approximately 100 million US households are online
· 64% of parents would be more likely to purchase if the site promoted “no credit card required”, according to Forrester Research
· Over 60% of consumers would prefer local phone bill or broadband billing for charging small online purchases.
All of this leads me to believe that there is a clear need for online payment alternatives in the US. So, I did some research and found ILD. ILD’s payment alternative is bill to phone. They claim to offer a simple and dependable checkout option that enables purchasers to pay for content from participating merchants by simply billing the service to their phone bill. I thought this was a good find, so here is the website: http://www.ildtelecom.com
@Emily,
Interesting. Do you have examples of online retailers using ILD at the moment?