Online shopping has become one of the most popular ways for Kiwis to purchase new items, whether they are buying clothes, hardware or new gadgets. According to statistics, 83 percent of Kiwis will shop online by 2026. That is great news for those that own an online shop or offer online purchases in addition to their physical store. However, to maximise the potential profit of an online store, it is important to understand which online payment methods Kiwis prefer.
Plastic Cards
The most popular way to pay for goods online in New Zealand according to the 2020 Payments NZ Consumer Study is via plastic card. 53 percent of shoppers use credit cards as their preferred payment method online followed by 46 percent favouring debit cards.
In order to offer payment via debit or credit card on your website, you need to integrate a payment gateway provider such as Windcave, Paystation or Flo2Cash. The biggest differences can be found in fees (look out for setup, monthly and transaction prices), the range of platforms each provider is compatible with and their supported payment options.
Mobile Wallets
Most smartphones nowadays come with their own integrated payment app, allowing people to store their various payment card details digitally for easier access. Payment apps including Apple Pay and Google Pay or third-party providers including Alipay and PayPal have gained popularity in recent years with 18 percent of Kiwis now preferring using mobile wallets for everyday online purchases. The easiest way to offer this payment method to your customers is by integrating one of the above-mentioned payment gateway providers that offer mobile wallets as a payment option.
Online Banking
While banking apps are being used almost daily for general payments, only 15 percent of Kiwis think that internet or online banking is the best way to pay for online purchases. If you are running an online store and would like to offer this payment method, you would have to make your own bank details visible to your customers so they can arrange payment.
Buy Now Pay Later
While plastic remains the preferred payment option for Kiwis, so-called buy-now-pay-later (BNPL) schemes have gained significant popularity in recent years. A survey undertaken by Kiwi-owned company Laybuy in 2019 found that 66 percent of respondents preferred using BNPL over credit cards, with another 45 percent saying they ditched plastic completely because they either weren’t using it anymore, were worried about accumulating debt or paying too much interest.
However, in 2020 only 12 percent of Kiwis claimed that payment services such as Genoapay, Afterpay and Laybuy were the best way to pay for products and services online. Offering purchases on your website via BNPL also requires a payment gateway provider that has this option built-in.
Direct Online Payments
According to the 2020 report, real-time transactions such as POLi Pay and account2account are used by 9 percent of the population as a preferred online payment method. This way, shoppers are able to use their everyday accounts to pay for purchases without risking additional interest payments or getting into debt. Direct online payments are an integrated option of most payment gateway providers. You can also enable pay-now options when sending out digital invoices via Xero, allowing customers to pay by simply clicking on the link in the invoice.
Deciding which payment option(s) you will offer your customers highly depends on your clientele. Younger generations are more likely to use digital solutions over traditional plastic. Knowing your audience or the kind of shoppers you would like to attract is essential. However, in order to maximise the benefit of your online shop, offering a range of payment methods is your best way forward.
If you would like more information on how to make the most of your website and increase your online sales, contact the friendly team at Energise Web today.