There are many ways that customers can pay for goods and services when shopping in-person. The most common methods of payment are cash, credit cards, and debit cards. Other methods include check, money order, gift cards and buy-now-pay-later services such as AfterPay.
Credit and debit cards are the most common form of payment for larger purchases. This is likely because they are more convenient than carrying around large amounts of cash. Cards also offer customers protections against fraud and other risks. In order to accept credit and debit cards, businesses will require a POS machine.
Checks are another option for paying in-store, but they are not as common as cards or cash. This is because they can take longer to process and can be more difficult for stores to accept. Money orders are similar to checks, but they are typically only used for very large purchases. Most small businesses will not accept checks in-store as there is a lengthy clearing process and requires manual deposit.
Gift cards are another payment method that can be used in-store. They can be purchased for a set amount of money and then used to make purchases up to that amount. Gift cards can be helpful for people who want to give someone else the ability to shop but do not want to give them cash.
Then there are buy-now-pay-later services that are getting more adoption. Similar to taking out a small personal loan, buy-now-pay-later (BNLP) is a type of financing that allows consumers to purchase items and pay for them over time.
But how do your customers actually want to pay?
Here are some quick stats we found on Payments Journal:
- 13.5% of consumers use the same payment methods when they shop online and in person.
- 11.9% of consumers prefer to use self-checkout options when they are available.
- 11.4% of consumers typically use cash for small transactions.
- 11.1% of consumers say that debit cards are better for managing their spending than credit cards.
- 10.3% of consumers say it is important to them that they have a wide choice in payment methods they can use when shopping.
- 9.6% of consumers find paying with cash less convenient than paying with a card.
And according to Worldpay, debit card and credit cards continue to dominate as preferred payment methods.
However, credit cards have a bad reputation for high interest payments and younger generations tend not to have access to a credit card.
Thanks to CNBC, here is a breakdown of average credit card debt broken down by generation:
- Generation Z: $1,963
- Millennials: $4,322
- Generation X: $7,155
- Baby boomers: $6,043
- Silent generation: $3,177
What this data shows is that Millennials, Gen X’ers and Baby boomers are quite happy to put purchases on their credit card and if your primary audience fits within this demographic, having a credit card processor linked to your business bank account is critical for your business.
Small businesses that do not accept digital payments are leaving money on the table with almost 3 in 4 consumers no longer wanting to pay in cash. Based on the same survey, consumers revealed that using a credit card online felt just as secure as paying in-person. And for purchases over $1000, consumers definitely preferred using credit cards.
Therefore, when combining the data from Worldpay and Thryv, if your primary customer demographic are Millennials and Gen Z, having a seamless cashless payment option is a must-have.
Furthermore, depending on where you are, what type of business you run, and what you sell, the answer to this question is going to vary. For example, in many South East Asian countries, consumers are used to paying in cash and access to credit cards is limited compared to Western countries such as Australia, Canada and North Americas.
In conclusion, cash and cards continue to be the primary ways that consumers expect to pay for purchases in-store. However, many are moving towards cardless methods such as Apple Pay, Samsung Pay and other NFC solutions. In addition to this, different age groups have differing preferences.
Originally posted 2022-04-23 15:18:32.