Alternative Payments- Fraud Library -Articles

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Alternative payment solutions are payment methods merchants can offer to their consumers that don't require the use of one of the major credit card associations. There are a number of reasons why merchants and consumers are looking into alternative payment types. Fundamentally the market drivers are cost, security/trust and ease of use.

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Alternative Payments may Lower your Sales Conversion??? ...

Huh? I thought the idea behind alternative payment types was to increase sales conversion. So you can imagine my surprise when I was listening to the eCommerce Checkout Report from Elastic Path, Jason Billingsley, on the Internet's Top 100 Online Retailers. It appears from their survey, that merchants that did not offer alternative payments had a significantly higher conversion rate than those that did offer them.

Additionally they reported that sites not offering alternative payment types and with higher ticket item sales had more than double the conversion rate of their competitors. The one good note on alternative payments, was that for those sales made with alternative payments, the average amount of the sale was significantly higher.

It should be noted that the survey is based on the top 100 online retailers, and for smaller retailers, I would expect the outcome to be different. Why do I believe that? One of the reasons shoppers choose alternative payment types is concern over the security of their credit card information. The consumer's trust level with a top 100 online retailer versus a small mom-and-pop operation is vastly different.


You can find the webinar at the getelastic blog link provided below, I would highly recommend it. The eCommerce Checkout Report is from Elastic Path and was done in 2007. The main subject of the report was "These are a few of the 23 tactics we evaluated as we studied the checkout process of the Internet’s Top 100 Online Retailers." http://www.getelastic.com/ecommerce-checkout-report/

To add a comment or opinion use our eCommerce Blog at: http://fraudpractice.blogspot.com/2008/05/alternative-payments-may-lower.html

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