Diversification is a term often attributed to the types of products/services you offer and how you market them. But if you want an easy way to bring in more revenue consider how diversification can be applied to the payment methods your company accepts.
These are the main reasons why diversification of business payment methods can be so powerful.
To Satisfy Every Generation of Shopper
The online shopping habits of different generations are radically different. Millennials may make a payment from their smartphone, but the statistics reveal that Baby Boomers are not likely to shop from a smartphone, despite spending more time online than Millennials.
They may prefer to send a check by phone, or they may even want to send a check by fax. Millennials may not even know what a fax machine is.
Choose one, and you risk alienating one generation. Dividing is fine if your company is laser targeted towards a specific age group, but for most businesses, they have a diverse range of customers.
To Open New Markets
It’s easy to think that the system of using remotely created checks can apply to the rest of the world because it works well in the US. But if you look to Europe checks are no longer accepted in many countries, including the Netherlands. Countries like Sweden, Belgium, and the UK are working to remove them from the system entirely.
You must adapt to how other markets across the world handle payment methods if you’re going to tap into those markets. Understand that international payment methods are very different from those accepted plans in the US.
To Encourage Impulse Purchases
One of the significant advances in payment technology is the ability to scan or touch a card (or even a finger) and have the payment made without the need to enter any information.
This presents a tremendous opportunity for businesses who want to increase the number of impulse purchases. The more steps you have towards completing payment, the higher the chance you have of a shopper abandoning the investment entirely.
The fastest payment methods allow you to maximize social media advertising campaigns and increase the number of low-value purchases made.
To Make Doing Business Easier for You
The apparent reason why you want to diversify your payment methods, as we’ve discussed, is to make sure you can meet the needs of as many different customer groups as possible. What a lot of people don’t talk about is why this can make doing business more comfortable for you.
The chances are you pay for goods and services through check, bank transfer, and online wallets like PayPal. Moving money around these payment methods can be costly.
Take PayPal as an example. You already pay 3.4% minimum for receiving payment for goods and services. Then you also pay to withdraw your money via poor exchange rates, so withdrawing to a bank account is never genuinely free with PayPal.
By diversifying payment methods, you can have a healthy sum in your online wallet that can then be used to directly pay for goods and services (especially remote service providers) without incurring additional fees.
Now imagine how much it will cost to withdraw money from PayPal, send it to your bank account, then send a check by phone.
To Take Advantage of New CryptoCurrencies
Finally, the rise of new technology has led to people abandoning the traditional check by fax and bank transfer entirely. Bitcoin is just one type of new payment method that’s starting to take off.
There’s no urgency to start accepting CryptoCurrencies just yet. However, it pays to be an early adopter. Whether it’s Bitcoin or another type of CryptoCurrency, attempting to join in with the mad scramble when they indeed enter the mainstream will be stressful, disruptive, and costly.
Last Word – Diversification is Profitable
These are the primary reasons why diversification can be hugely profitable for your businesses. You’re not just widening your reach; you’re encouraging different types of purchases, such as the impulse shopping.
It’s easier than ever to set up new payment methods. Even if they’re only used sparingly, that’s money you wouldn’t have otherwise seen. And every little bit helps.
What does other payment methods your business already accept?