Why You Need Offline Payments In Your Shopping Cart

November 08, 2011 · by Craig Vodnik

Imagine the payment methods in your shopping cart as different roads to the destination we call cart conversion. If you build more roads, you’ll have more customers converting, right?

The problem with offline payment methods is that digital e-commerce customers expect instant delivery. But customers who pay offline through wire transfers, PayPal, Konbini, or Boleto Bancario require an additional offline step that delays the delivery of the digital product.

Unfortunately, any time an offline payment order is submitted, there will be a significant percentage of orders that are never paid. Some customers will experience “buyer’s remorse” after placing the order, some realize they don’t have funds available and some simply forget about the order.

The hard truth is that the majority of these “lost” orders will remain unpaid. So is it worth the time, effort, and money to incorporate various offline payment methods into your shopping cart? You bet’cha!

Advantages Of Offline Payment Methods

When customers pay online with credit cards and want to get their money back, they can simply call their bank and rescind the payment through the chargeback process. Typically, this means that companies need to keep a reserve of money for up to six months to cover chargebacks.

However, when money arrives for an offline payment, the customer cannot automatically rescind the payment. Therefore, one basic advantage is that revenue from offline payments can be used immediately.

Another advantage of using offline payments in your e-commerce system is that there’s less private information stored to attract hackers. In the case of PayPal, the only personal information stored in your servers is a customer's e-mail address, which is regardless captured during the order process.

To me though, the biggest advantage of incorporating a variety of offline payment methods in your e-commerce platform is that it allows you to cater to the global market.

I highly recommend looking into those methods that tend to be country specific, like Konbini (Japan), iDeal (Netherlands), and Boleto Bancario (Brazil). These payment methods can make you stand out among the competition by offering customers across the globe the ability to send you money in ways according to their preference.

Disadvantages Of Offline Payment Methods

If you’re not careful, allowing offline payment methods can bite into your bottom line. Proper processes need to be planned in advance to prevent products being delivered to the customer before the payment is cleared.

If you allow offline payment transactions to function like credit card transactions, where the order submission triggers delivery of the product, then customers will receive the product before payment is made.

This detail is especially important when it comes to fraud prevention. If your system allows customers to receive products before paying, then there is nothing to prevent frauders from acquiring licenses of your product for free.

Also, keep in mind that while some offline payments come with virtually no cost, there are those that will come with a price tag of up to 25% of each transaction. Do your homework before implementing such customer friendly features.

Despite this concern any additional sales will most likely offset these costs because, as I have pointed out previously, customers are more likely to purchase when they have their preferred payment methods and currencies available.

Offering offline payment methods in your shopping cart is strategic. If handled incorrectly, you open yourself up to fraud attacks and frustrated customers.

Without them, you’re shutting the door on many potential customers; customers who would have been delighted to buy your product using their preferred payment method.

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Category: Shipping Optional | Tags: Credit Card Payments, Payment Processing, PayPal