Alternative payment method, also known as APM, enable payments using mobile wallets, pre-paid cards, and even buy now, pay later platforms. The demand for APM is also rampant around the world. However, the methods are very local, meaning an alternative payment method popular in Europe might not even be available in the Asian markets.
Businesses around the world are now relying more on alternative payments. There are many benefits of enabling alternative payment methods. Some of the most common advantages are an increase in sales by providing preferred payment options and access to a broader customer base.
However, there are many unexpected ways businesses can benefit from introducing APMs. Some of them are:
Swift and efficient payment
FinTech companies usually operate the alternative payment platforms. These companies focus explicitly on the underlying technology to make the payment princess efficient for customers and businesses.
Most of the APMs provide a near-instant execution of the payment. It also includes businesses receiving the money faster compared to traditional methods that may take days, if not weeks.
Lower processing fees
An advantage of APMs is the significantly low processing fee, when compared to credit card alternatives. Credit cards incentivize the customers, but the businesses have to bear the cost by paying more as transaction fees. This exorbitant fee can be easily avoided with the usage of APMs.
Some APMs might charge a small fee from the merchant for payment processing, but it is nowhere near the charges of the major credit card companies.
Reduced chargeback
It is another advantage of APMs over credit card payments. Chargebacks occur when a customer requests the reversal of a credit card transaction. In such a case, both the credit card issuer and the merchant bank review the claim, which could take weeks to complete. The business can also raise a dispute against such claims, but that will only increase the chargeback period.
Businesses suffer a lot in such a situation as the payment gets stuck. Such risks can be significantly reduced by using alternate payments from bank accounts and direct debit accounts.
Enhanced credit
The availability of credit always boosts the chances of closing the sale of any product. Innovative APMs like buy now, pay later (BNPL) platforms enable customers to purchase a product on a credit (from the BNPL company, not from the merchant) and pay them at a later stage.
This type of innovative alternative payment encourages customers to purchase more goods by expanding their financials over a wider period. Also, if a customer defaults, the BNPL company bears all the risk.
Role of Macropay
Macropay can help your business choose the correct payment method for your target market. We offer top-notch consultancy and access to various APMs with end-to-end integration and support. Our cutting-edge open banking technology is also made available to interested merchants.
Reach us at [email protected] to speak to an online payment expert.
