Spoilt for Choice: The Importance of Alternative Payment Methods

Mediums of exchange have grown exponentially alongside the rapid advancement of technology that has characterised recent decades.

The days of cheque books and cash-carrying have largely ended for many as the world pivots to more novel, digital payments methods. Even industry mainstays such as MasterCard now face stiff competition from innovative, alternative payment methods (APMs) that offer far more frictionless transacting and wider accessibility.

You’re likely familiar with major APMs — loosely defined as payment methods other than cash and major credit cards. Think Paypal, Venmo, AliPay, ApplePay, Stripe, crypto — any of the array of payment services now available with a simple app download.

Examining the current APM landscape, it’s easy to find oneself lost in an ever-growing ocean of competing payment providers.

The Business Case for Adopting APMs

In a globalised world flush with competition, customer acquisition and retention is necessarily a key focus of any merchant. According to data from Statista, cart abandonment rates average around 75% — an incredibly high dropoff rate.

By offering APMs that reduce friction for end users as far as possible, companies can gain a significant edge over competitors relying on legacy payment methods. The introduction of mobile payment methods like ApplePay, GooglePay, and Samsung Pay naturally caters to different audiences. By accepting these (competing) APMs, end users are more comprehensively included, regardless of their device.

However, given the plethora of options available, deciding which services to implement, and when, presents its own challenges.

Deciding on the Right Alternative Payment Method for Your Business

It’s important to understand that different APMs have gained traction in different regions, driven by accessibility, ease-of-use, and regional support for certain technologies.

While Paypal reigns supreme in the US, the platform’s international support is somewhat limited, making it an unpopular choice in regions like South Africa, where only users of First National Bank can efficiently use PayPal.

Conversely, AliPay and WeChat are ubiquitous in China, where citizens receive salaries, pay rent, split bills, and book travel plans directly from their WeChat app. Given the Chinese State’s hardline stance against Google and US-based technology firms, AliPay and WeChat have enjoyed the luxury of first-mover advantage in a captive market. Venture outside Asia, however, and you’d be hard-pressed to find merchants accepting these services.

Thus, it’s vital that the implementation of APMs for merchants is informed by comprehensive analysis of key target demographics, their locations, and preferred APMs in the regions concerned.

Mercuryo’s APMs

Recognising the need for robust alternative payment method support, Mercuryo is consistently seeking to implement novel APMs to drive further adoption and simplify accessibility. At present, Mercuryo supports the following payment methods:

• MasterCard
• Visa
• UnionPay
• ApplePay
• GooglePay
• SEPA (via VOLT)

Mercuryo’s fiat on- and off-ramp and BaaS (Banking-as-a-Service) products can be easily integrated into any platform using a single API — offering users the freedom to choose from a wealth of payment methods without your business needing to worry about each implementation.

Get in touch with our team today to learn more.