The Indian e-commerce sector is believed to be at a late growth stage amidst the emergence of new business models (D2C commerce, hyperlocal deliveries, etc.). Our country is home to more than 20 e-commerce unicorn startups that are pushing online shopping across different customer segments to drive further growth. Driven by the increased smartphone/Internet penetration and government initiatives, the Indian ecommerce market is running towards the mark of $400 billion.
Amidst all the growing statistics, one aspect that is mutually beneficial for both businesses and consumers is the availability of multiple payment methods. Previously, cash was the only mode of payment in the Indian markets. Nowadays, e-commerce businesses have a plethora of payment options at their checkout to ease payment processing for their target consumers.
If you have plans to start an e-commerce business or have recently launched your online store, you might only have a few payment options available at the checkout.
Want to know how to add multiple payment methods to streamline online payment acceptance? Let’s set our eyes on why it matters in the first place.
Why add multiple payment methods at your checkout?
Easy to retain existing customers
If you consider the customer lifetime value in detail, you will realize that retaining existing customers is less costly than attracting new ones. In fact, the probability of selling your products to an existing customer is between 60-70% (Source). In simpler words, if your existing customers continue to buy from you, you will be less worried about acquiring new customers.
With the availability of multiple payment methods on your website, you give your existing customers more reasons to continue buying from you. For example, if one customer buys an item worth Rs. 1000 from you every month and pays via UPI, he may want to use his credit card to buy from you later and utilize the available credit limit.
On the flip side, if you only offer UPI as a payment mode, he may think of buying the same item from somewhere else in case he does not have the required amount in his bank account.
You can also benefit from the paymode sequencing feature offered by leading payment gateways in India to allow you to set the order of payment methods at checkout.
Recommended Read: What does Paymode Sequencing at Checkout Mean?
Easy to attract new customers
Consider the following example to understand this aspect better –
You start a business to sell groceries online with limited functionalities on your business website. Initially, the customers are only allowed to place orders and pay via cash-on-delivery. While the initial sales are good, you then realize they are stuck at a particular per-day-sale value after a few months. Since you do not have more capital to increase the product inventory, you can only think of continuing the business as usual.
Many business owners like you find themselves stuck in such spiraling situations. Dig deeper and you will realize that you are only targeting buyers who prefer paying in cash. This can be one reason behind the lack of sales growth.
Adding multiple payment methods to your checkout also means targeting a broader range of customers who are willing to pay you via credit cards, debit cards, UPI, and other preferred payment options.
Increase in ticket size and order frequency
With online selling, you would want to set an upper limit to the purchases made with cash on delivery options to prevent payment fraud. But at the same time, it will also limit the order ticket size to a certain amount when COD is the only payment method available. Irrespective of whether you sell furniture online or plant, you will restrict your sales by having cash as the only payment method. Similarly, those who want to pay via other payment methods but know that you only accept cash, would only buy from you once in a while.
Multiple payment methods on your online store can help you grow your business further with higher order value and order frequency. Those who want to buy premium products you sell will most likely find it easier to pay via a credit card or UPI than in cash. If you offer subscription-based products, it will also attract customers who apply for subscriptions for regular needs.
Reduced dependency on a single payment option
Many businesses rely only on a single payment method to manage and run operations in their entirety. But they face the continued risk of becoming inoperational if customers choose not to use that method to buy from them. Even established businesses face this problem if they are mainly dependent on one payment method.
By offering multiple payment methods, you can avoid loss of sales because of customers’ preferences towards using a specific payment method. With multiple options available to them, buyers who may face some issues with one option can use the other one to proceed towards placing an order at the checkout.
Growth in your loyal customer base
Simply put, customer loyalty results in repeat business for a company over time. This is mainly the outcome of a great value delivered through the products or services. In terms of numbers, 93% of customers are more likely to buy more from brands that offer excellent customer service (Source: Hubspot).
Buyers who know that they can pay you using their preferred payment option are more likely to return and buy again, hence increasing your loyal customer base.
Pair it up with another statistic that says 81% of customers trust brands and products recommended by their family and friends. Eventually, your business will become a flywheel in which repeat customers become the harbinger of new customers.
Improved cash flow and more profits
More customers (existing and new), more orders, and more sales will eventually result in better cash flow and higher profitability. This is possible with multiple payment methods listed on your online store.
Unlike relying on a single payment method, you will be able to see payments from customers coming into your account more quickly through multiple payment methods.
If you are convinced about adding multiple payment methods for your customers, let’s get into action.
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