Alternative Payment Methods: Why Retailers Should Care.

Gold. Coins. Bills. Cheques. Credit cards. Mobile pay. Over time, each was considered an alternative payment method until they all became common ways people paid for what they wanted. This gradual progression was enabled by technology that evolved over centuries. Then accelerated to decades. Then years.

That brings us to today where technology is evolving by the second. 

The open global economy has merged our domestic progression with progressions from around the world, some of which are far further ahead than ours. These twin explosions of technology and global reach have made it difficult for retailers to keep up with how their customers want to pay them.

And they should want to keep up because that global customer pool is more likely to choose retailers that make it easy for them to pay. Just like you might be less likely to frequent places that only take cash.

What are alternative payment methods?

Alternative payment methods stand apart from the traditional methods of payment you’re probably used to (cash, credit card, cheque). More popular alternative payment method examples include:

• Digital wallets

• Buy now Pay Later

• Peer-to-Peer (P2P) Apps

• International payment platforms

Many alternative online payment methods leverage digital commerce and the power of the smartphone, albeit in different ways and for different people. Some skew younger vs. older, while others are popular in specific countries. Most importantly, and why retailers are adapting, most alternative payment methods are frictionless, secure, easy to use, and generally solve common customer pain-points.

Examples of Alternative payment methods retailers should consider accepting

These are the payment methods most likely to be requested by a not-so-distant-future customer. If you’re not offering these options, your competitor might.

PayPal

Extremely popular with European consumers (especially in the UK and Germany), PayPal’s latest feature is called Pay Later. It lets consumers split purchases into smaller installments.

Google Pay

Highly convenient and extremely popular across the world, Google Pay lets customers securely check out on third-party sites using saved information. The app can also store loyalty cards and branded gifts.

Apple Pay

Apple Pay is a popular North American option for iPhone and Mac users. It’s cloud-protected, and transactions are completed through tokenization, so retailers don’t see sensitive information.

OXXO

Native to Mexico, where bank accounts and credit cards are less common, OXXO is a voucher-based payment method and the largest alternative payment method in that country.

Alipay

In China, Alipay is by far the most popular mobile payment app. Ninety-two percent of Chinese nationals with digital payment capabilities use Alipay. It’s an e-Wallet app like Apple Pay, in that debit or credit card details are stored in the app, and purchases are made in stores and online using the app.

WeChat Pay

WeChat Pay is the second-most popular payments platform in China, with 1.2 billion active users in 2023. It’s part of WeChat, a Chinese super app and the world’s largest social media and messaging platform.

AfterPay

Australians and New Zealanders are heavy users of this buy now, pay later online payment method that works similarly to PayPal’s Pay Later feature.

Venmo

Venmo is popular with young people in North America because it doesn’t require a checking account. It allows customers to set up early direct deposits and earn cash back on purchases at select retailers. Also, users can deposit checks without a bank account.

The benefits of offering one or more alternative payment methods

To sum it up, the most important benefit of offering alternative payment methods is to make it easy for more people to buy from you. More than half of Canadian consumers abandon a purchase if they can’t use their preferred payment methods, so it makes sense to avoid unnecessary drop offs.

Other benefits of offering alternative payment methods include:

• Being able to demonstrate a commitment to inclusion.

• Leveraging cultural-based marketing as a compelling point of differentiation in your marketing.

• Saving money on fees for more customers (depending on the method).

• Opening up new strategic partner opportunities.

More than 85% of merchants plan to accept new alternative payment methods in the next one to three years. Joining the party and investing in this direction will help attract more customers to your retail business.

Where OTT Pay Fits In

Our POS terminal and eCommerce solutions will set you up to accept all kinds of payment methods using an all-in-one solution. And you’ll be able to serve the growing international community of potential customers with our World of Payments™ platform that includes the leading international e-wallets such as Alipay and WeChat Pay, with billions of users worldwide.

Embrace the diversity in your current customer base. Give customers familiar ways to pay you. Unlock new markets with less friction. Do it all with the OTT Pay Payment Processor and make getting paid by anyone easier than ever.