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The adoption of alternative and digital payments in the last few years alone has been undeniably explosive. But what exactly is an alternative payment? At Sezzle, we think of alternative payments as ‘payment disruptors’. They disrupt the payment business and introduce the experience of payments. Payment platforms are no longer just the means to an end of the checkout process; they are connections. They connect retailers to consumers on a level that payment platforms never have before.
Rather than just paying with a credit card, floods of next-gen consumers are creating a relationship with payments – they are immersing themselves in the experience. Whether it be a social connection, a financial knowledge aspect, or an emotional attachment, alternative payments have taken the traditional pillars of payments and created an entirely new industry aimed at helping shoppers while increasing sales for retailers.
What Are Alternative Payments in eCommerce?
POS financing, a sector of alternative payments, is an incremental method of payment. At Sezzle, we offer interest-free financing over six weeks. For consumers, especially younger generations, this method of payment is a necessity of budgeting–and not simply with big-ticket items. 30% of millennials don’t own a credit card, and even less for Gen Z. These next-gen consumers are looking for ways to budget responsibly without the fear of debt and interest that traditional credit can bring. Buy Now, Pay Later is the ideal solution for shoppers looking to spread payments over time at no additional cost–whether that be a couch, a new outfit for a job interview, or even a run to the grocery store.
For any brand looking to hit with young shoppers, the option of payments has become necessary. Yet even with CPG and smaller ticket items, Sezzle brings merchants, on average, a 32% increase in Average Order Value, 40% fewer returns, and provides 14% share of checkout.
Imagine this: You go to the grocery store, but they only take Mastercard and not Visa. If you’re a Visa cardholder, you will abandon your cart right there and head to the competitor grocer next door. As payments expand, so does the demand for multiple options. In a recent survey done by Netfluential, data showed that 82% of BNPL users surveyed preferred to have more than 1 installment option on a retailer’s website. They want options.
Did you know? 42% of U.S. shoppers don’t complete a purchase if their favorite payment method isn’t available.
“When we introduced Buy Now Pay Later with Sezzle, we were able to increase our average order value by 8%. We also experienced the highest number of signups with a promotion that exceeded Cyber Monday engagement. Overall a great experience now over 6 months with them.” – quote from TJ Pingatore from Wine Chateau.
What’s Next?
The past year has only accelerated the digital shift for CPG to dive into eCommerce. Whether it be personal care or packaged foods and beverages, young consumers are looking for ways to enjoy the products they love while also working with the limited budget they may have. This is where alternative payments come into play. Young consumers are no longer reaching for their traditional credit card in fear of growing debt and interest, they are instead searching for alternative payment options. By CPG brands providing alternative payment options they are allowing young shoppers to enjoy the products while also inadvertently teaching them to budget responsibly.
Interested in learning more about how to integrate alternative payments in your CPG eCommerce strategy? Reach out to us here.