Buy Now, Pay Later: How to pay using alternative payment methods
IBF Entrepreneur Online
It’s not just about cash or cards anymore. Discover the three most popular alternative payment methods, how they work and why they’re essential for your e-commerce business.
What are alternative payment methods?
Alternative payment methods (APMs) go beyond traditional cash or card payment methods. Popular options include digital wallets (apps such as Google Pay, Apple Pay, PayPal), bank transfers and ‘buy now, pay later’ (BNPL) options—these alternatives have emerged as the rising star of preferred ways to pay.
Buy now, pay later solutions
BNPL lets customers purchase now and pay later in smaller installments. The BNPL provider pays the merchant upfront, while customers repay over time—often interest-free and without lengthy credit checks. This flexibility can encourage hesitant buyers to complete purchases and even opt for higher-value items.
BNPL has proven popular among Millennials and Gen Z who prefer alternatives to traditional credit cards. Leading providers include, Affirm, Klarna and Sezzle.
Digital wallets
Digital wallets securely store payment details on your smart device, letting customers pay online in just a few clicks. By blending security and speed, digital wallets help create a more friction-free and streamlined buying experience for your customers. This, in turn, encourages more purchases and can reduce cart abandonment.
Bank transfers
Bank transfers may not have quite the cool factor of digital wallets, but they can be a refreshingly straightforward way of getting paid. Customers log in to their banking app, then manually transfer funds to you et voila! Bank transfers have lower transaction fees than credit cards and offer strong security since funds move directly between accounts—plus they are ideal for avoiding currency conversion costs on cross-border transactions.
The most widely used service in Canada is Interac e-Transfer, that works with all the major financial institutions. Interac e-Transfer is also integrated directly into just about all major banking apps, which makes sending and receiving payments simple and straightforward.
Four reasons why your e-commerce business should offer alternative payment options
- You reach a wider audience: APMs are more inclusive, full stop. Let’s say, for example, that you have a customer who’s interested in buying from you, but doesn’t have much cash on hand. A BNPL method allows them to budget and split big purchases into smaller, bite-sized chunks. Or your customer base may prefer digital wallets for the increased safety and security they provide.
- Reduce costs for yourself and customers: APM’s typically come with lower transaction and bank processing fees, which means you don’t have to pass those costs on to your customers.
- Increase customer trust and loyalty: by giving customers the option to pay via a method that they want, you can have a positive impact on building trust and long-term loyalty.
- Boost brand perception: offering your customers multiple, flexible ways to pay shows that your brand is forward-thinking, inclusive and willing to meet your customers where they’re at.
You now have the essentials on why alternative payment methods matter for your e-commerce business. If you’re just starting your e-commerce journey, don’t sweat, it. We can help you launch your website in five easy steps, register your .CA domain name and more.
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Source: Cira
