Over the past 15 years, online shopping has moved from a novelty to a necessity. The growth of mega retailers and niche shops alike has transformed the world and pushed ecommerce into the mainstream.
But even with the wider acceptance of online shopping, payments can still be a challenge for customers. This is especially true in areas where credit card penetration is low or when trying to make large purchases all at once. Customers want to feel safe when spending money online and they also want the freedom to choose a payment method that is right for their specific purchase.
This is where alternative payment methods come into play, there are three options that have become particularly popular. The first is cash on delivery, which (unsurprisingly) involves paying for your purchase when it arrives, rather than at the time of purchase. The second is ‘digital wallets’, a piece of technology that allows shoppers to securely store all their payment information (card details, shipping addresses, etc.) under a unique username and password that can be used across multiple sites.
The final method, which we will be highlighting in this post is installments. An alternative payment method that has been shown to boost consumer confidences, create better user experiences, and improve your site’s overall conversions.
What Are Installments?
Installment payments have existed for decades in the world of physical retail and they are finally making their way into the ecommerce space. Installments is a process that eases the financial burden of large purchases and breaks the total payment into more manageable monthly chunks.
This alternative payment method not only gives your business added authority but it also helps to make your products more accessible to a wider range of income levels.
How the Process Work
Installments are usually offered at the checkout stage and should ideally provide your customers with a few different options like, 3 month, 6 month and 12 month terms which will often depend on the customer’s bank. This provides maximum flexibility and let’s each consumer tailor the way they pay.
Some of the best installment options even have perks for your business like receiving the full purchase immediately while automatically converting the customer’s single payment into monthly ones.
Like any incentive plan, offering installments can greatly improve your site’s conversion rates and many consumers prefer installments over more traditional incentives. A recent survey of consumers by installment provider Splitit found:
– 54% of credit card users prefer installments over free shipping
– 63% of credit card users prefer installments over 10% discounts
– 40% of credit card users would increase size of a purchase if offered installments
As the ecommerce space continues to evolve consumers will always be on the lookout for the latest ways to pay. Security and convenience rule in this space and as a business, you need ensure that you are providing a range of options for your customers.
Installments have proven especially important in today’s online marketplaces and represent one of the most popular alternative payment options you can provide your customers. If you’re looking to stay competitive online, consider making installments part of your check out page.