Chirag Patel, President of Digital Wallets at Paysafe, writes for Payment Expert on the importance of flexibility of merchants, specifically when it comes to accepting cash at online checkouts.
Merchants who accept online cash payments at the checkout stand to gain a significant competitive edge.
Debit cards and credit cards continue to be the most popular way to pay for goods and services online, but consumer preferences are changing.
Our latest Lost in Transaction research — which surveyed 11,000 consumers in 10 countries across the Americas and Europe — shows that 47% would prefer to pay online with eCash, e.g. making a financial transaction online and then paying for it in cash at a nearby store.
In fact, if eCash payments were an option, 44% of respondents would buy online more often. This suggests that merchants who don’t currently accept eCash are actively losing sales and missing out on future potential revenue.
Seeking control
Our research suggests that there are two key factors driving consumer demand for eCash: the increasing importance of online security in eCommerce transactions as a result of record levels of online fraud, and a desire for more control over spending due to consumers becoming more risk-averse and budget-conscious.
This is echoed by 44% of our respondents who say they would choose the payment method they feel best protects them from the risk of fraud and 70% who worry about sharing financial details online.
With the notable exception of credit cards, lending products are becoming less popular. 44% of respondents have changed their online payment habits to make better use of shrinking budgets and 40% have shifted towards payment methods that enable better tracking of their spending.
eCash, which doesn’t require consumers to share any financial details, makes online payments safer. Customers receive a unique barcode for the transaction, which they can scan at one million points of sale in 55+ countries to complete the purchase securely and privately.
A recent survey of UK ATM users found that 39.2% are using cash to control their spending. eCash can serve the same purpose: according to our research, 26% of those who have changed their online payment habits to gain closer control over their spending are choosing to pay with eCash more often.
How does this benefit merchants?
First, offering eCash at the checkout creates more payment choice. This is crucial when considering that customers are ready and willing to walk away from online transactions when their preferred payment method isn’t available.
Second, cybercriminals can’t get their hands on sensitive data because the transaction is settled in cash in person and no financial details are shared online. This removes the risk of fraud or chargebacks and allows merchants to boost trust without introducing needless friction into the payment process.
Third, with one in ten online card payments getting declined, eCash can be a fallback if consumers run into payment issues online, which can significantly impact the volume of abandoned transactions.
And finally, eCash can enable merchants to address a wider market.
According to a 2021 Morning Consult survey, 34% of Americans are either unbanked or underbanked. Similarly, in the UK, 5 million people are dependent on cash, either because they’re unbanked, they’re on a low income, or they receive part of their salaries in cash.
For these people, online shopping — where payment can only be made with a debit card, a credit card, or a digital wallet that’s connected to a card or bank account — is difficult or simply impossible. Adding eCash to the checkout can open the door for them to participate in the online economy.
As such, eCash is more than just a revenue opportunity – it also increases financial inclusion.
With 20% of all retail sales worldwide — including sales of essentials like groceries — taking place online in 2021 and expected to increase to 25% by 2025, those who rely on cash would be unable to buy essentials or get locked out of the economy completely without eCash solutions.
eCash payments are critical to the future of eCommerce
Cash is more than just a convenient means of payment. It’s a guarantee of privacy and anonymity, a way to control spending, and a fail-safe when technology lets us down. And, for many in difficult circumstances, it’s a lifeline they depend on through their most challenging times.
Offering eCash for eCommerce serves the same purpose. Especially with cybercriminals getting more sophisticated, and a dire economic outlook, it stands to reason that savvy consumers would want to take steps to be safer and stay on budget.
Fortunately, eCash payments benefit merchants just as much as customers.
Adding it to your online checkout is relatively simple and will increase trust, lower your risk and give customers’ lifetime value a healthy boost.
