Best Ways to Pay | 5 Flexible Payment Options for High Conversion Rate
2020 is the year of flexible payments – more people are buying online than ever and brands need to adjust accordingly to fully capture the influx of new opportunities.
Payment methods, much like the rest of checkout UX, were once an afterthought but are now becoming the center of the show. In a 2019 study by PayPal, researchers discovered that customers are more likely to buy from an online store that offers their preferred payment method.
This newfound knowledge has quickly changed the game in eCommerce, shifting focus to deeper and more consistent analysis of customer behavior. The result? Dramatic increases in conversion rate (CR), average order value (AOV), and revenue per visitor (RPV), among equally significant decreases in other critical metrics like cart abandonment rate (CAR).
So, what are flexible payment methods? Flexible payments are a new breed of eCommerce transaction that empowers customers to spread out, split up, or extend fulfilling the cost of an item – making it much easier to complete purchases. These alternative ways to pay give shoppers more convenience, lighten the load on their wallets (especially during the holidays), and generally create a more stress-free buying experience.
We put together this article to showcase some of the brightest teams in the flexible payment space and to give online retailers a good starting point in exploring the benefits of payment optimization.
Let’s begin with probably the most well-known of the lot, Afterpay.
1 | Afterpay cuts down on fine print and invests in customer trust
Afterpay is one of the one most popular new payment methods, allowing shoppers to enjoy their favorite products now and pay later.
They have many of the top brands to choose from in clothing, cosmetics, and more including American Eagle, ULTA, and Urban Outfitters just to name a few.
Based out of Australia, Afterpay operates in the United States, United Kingdom, Australia, and New Zealand. They merged with Touchcorp in 2017 to form Afterpay Touch Group.
Here’s how Afterpay works for retailers:
- Sign up. New Afterpay users can get an instant approval decision in minutes.
- Purchase. Your customer completes their order and you get paid the full amount up front. That’s a win-win.
- Pay over time. Customers pay four installments every two weeks, directly to Afterpay.
- Nothing extra to pay. Always zero interest, never additional fees when shoppers pay on time.
Out of their 10M+ global customers, 73% are Millenials and Gen Z. Merchants will be impressed to see that Afterpay’s partners see a 22% boost in cart conversion and more repeat shoppers, in addition to an average order value (AOV) increase of 40% on average.
2 | Zip is becoming a big deal for shoppers and stores
Trusted by 19,000+ partners, from different industries – big and small, Zip is another flexible payment provider from Australia. Much like Afterpay, Zip has a simple, 3-step process for merchants to begin using the service (signup, integration, acceptance).
Partners have experienced up to 30% growth in sales, up to 70% increase in order value and up to 80% increase in repurchase rate.
The company also boasts no fraud risk, with simple, ethical and transparent pricing.
Most recently, Zip has partnered with Quadpay to enter the $5 trillion+ United States retail market.
Expect to see more of both companies as they greatly expand their reach to merchants and consumers in the coming year.
3 | Splitit makes credit card payments easier
Based out of New York, NY, Splitit is the only buy-now-pay-later plan that lets shoppers use their existing credit card to pay in small, monthly installments.
Customers do not have to apply for a new credit line or qualify for a new credit card – Splitit works on their existing credit cards so customers also enjoy all of their regular credit card benefits such as points, cash-back and mileage.
For businesses, having this additional payment option can mean increased conversion rates, higher average tickets, increased customer satisfaction and reduced barriers to purchase.
According to Splitit’s site, 35% of shoppers are more likely to make a purchase if offered the ability to pay in interest-free installment payments.
4 | Openpay spreads costs and breaks up big purchases
Openpay is another top flexible payment solution from, you guessed it, Australia.
Customers can shop with partners across fashion, home, health, automotive, dental, sport and pet care and pay smarter in easy instalments, with no interest.
Here are some of Openpay’s key benefits for eCommerce stores:
- Get paid in full up front. You’ll get paid right away (minus any fees) while customers spread the cost.
- Gain new customers. Their extensive marketing database delivers cross sell opportunities to customers who prefer using Openpay.
- Reduce customer returns. Customers make their first payment upfront, reducing post-purchase regret.
- Better brand loyalty. Flexible payment options give customers something to come back for.
Openpay integrates easily with most platforms, including Shopify, Magento, BigCommerce, and many more. Most notably, the company received top honors this year at the Australian Growth Company Awards which should further their recognition in the market.
5 | Quadpay gives customers the flexibility they want
Like Splitit, Quadpay is also headquartered in New York, NY – offering a pay-over-time solution for both shoppers and businesses. According to their site, the platform can be integrated in just 10 minutes with no APIs required, instantly boosting sales.
Customers love the flexibility of splitting their payments into 4 installments over 6 weeks.
In turn, QuadPay’s partner merchants enjoy higher AOV and conversion, more repeat purchases, and immediate payment. Two other points to consider are an 80% increase in repeat customer rate and 20% increase in sales processed through the service.
Additionally, businesses get access to seamless payments, community exposure, acceptance of all major credit cards, and even progress tracking of customer data.
With over 3,000 merchant partners, which include big names like FashionNova and GameStop, Quadpay is another flexible payment powerhouse to keep an eye on.
Increase sales by knowing customer digital payment preferences
Now that you know some of the best options available and what merchants have achieved with them, it’s time to make sure you’re offering the right payment methods to your shoppers.
Highlights from the 5 companies we took a look at:
- Afterpay serves one of the biggest customer bases, many of which are Millenials and Gen Z who are most in need of flexible payments.
- Zip is throwing up big numbers and finally expanding beyond Australia, thanks to their new partnership with Quadpay.
- Splitit is the way to go if you’re looking to make your existing credit cards more powerful.
- Openpay brings in new customers while helping you better retain your current shoppers.
- Quadpay may be the best bang for your buck with their robust offerings and rapid growth.
This year is just the beginning for flexible payments – analyze your checkout experience and know your customers’ favorite ways to pay.