Last editedJuly 20232 min read
Think outside the card. From Apple Pay to Alipay, there’s a whole world of alternative payment options to consider. If you’re only catering to customers with credit and debit cards, you could be missing out on those who prefer to pay with their digital wallet or through buy now, pay later. Yet with so many alternative payment methods out there, how can you narrow down the field? Here are the top alternatives to consider.
What are alternative payment methods?
Traditional forms of payment include major credit and debit cards as well as cash. The meaning of alternative payment covers any other form of payment that doesn’t fit into this category. It includes electronic payments like mobile and bank transfers. Alternative payments also include localized cards, gift cards, cryptocurrency, and BNPL services.
Why should you offer alternative payment methods?
The choice to offer alternative payment methods boils down to the twin benefits of convenience and flexibility. Customers are more likely to make a purchase if they see their preferred method offered at checkout. By offering alternatives to card payments, you can give conversions an easy boost while edging out the competition.
Alternative payment methods also help your business cater to other regions of the world. If you have an eye towards global expansion, connecting with customers in other countries means researching their local preferences. Some countries will have their own localized cards outside of the wider Visa and Mastercard networks, for example, while others will prefer to use a payment app.
List of alternative payment methods
Here’s a breakdown of some of the most popular alternative payment options for Australian businesses.
Online banking: This category includes any payment made directly from a bank account, including direct debit payment solutions. Customers control payment from their computer or mobile app.
Wire transfers: Funds transferred directly from a customer’s bank account to the business’s bank account using a wire service.
Digital wallets: Services like Paysafe and PayPal store card and bank account details in a digital form. You can also store money in a prepaid account for future use.
Cryptocurrencies: Digital coins like Bitcoin that work using blockchain technology. There are thousands of cryptocurrencies, though some are too volatile to be viable for business use.
Mobile payments: Services like Apple Pay and Samsung Pay let customers checkout online or with a tap of their phone, using stored payment details. These are suitable both for online and in-person contactless payments.
BNPL services: Buy now, pay later services like Klarna and Afterpay spread the cost of a purchase out into regular, interest-free installments. The service provider handles payment collection on your behalf.
Real-time payments: Direct debits take a few days to settle into your bank account, but real-time payments perform the same function without delay. Australia’s New Payments Platform has created the PayTo system for instant, real-time alternative payments.
What is the best alternative to credit card payment?
So, which of these alternative methods is the right choice for your business? The Reserve Bank of Australia’s most recent Consumer Payment Behaviour survey shows that the best choice is probably a mix of various methods. While BPAY and internet banking accounted for 5% of online purchases, over a third of consumers also used their mobile apps.
To find the right fit, consider your market, whether it’s within Australia or abroad, ecommerce or in-person. You should also consider fees, settlement times, and convenience. GoCardless offers a Direct Debit solution with easy set-up and minimal fees, automating the payment collection process. Set up instant, one-off, or recurring payments directly from your merchant dashboard. With the new real-time PayTo solution, you can also create a truly frictionless checkout experience for your customers – adding up to increased conversions with minimal effort.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.