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Payment Methods

Online Payments vs. Credit Cards

There’s way more to payments than cards.

Written by

Ruca Sousa Marques


11 January 2016

Cards are not the only way to pay for online transactions. Between bank transfers, direct debits, e-wallets, mobile payments, local card schemes, pre-pay, post-pay, and e-invoices, there are over 200 alternative payment methods (APM) in the world of e-commerce.

In many countries, APMs are the preferred payment methods, and they can represent a higher proportion of e-commerce growth compared to credit or debit cards.

For example, 54% of all e-commerce purchases in the Netherlands are paid for using iDEAL, with credit cards holding a mere 11% market share. In Germany, cards are used to pay for only 21% of total e-commerce transactions, with customers preferring to use ELV, Paypal, Sofort, and Giropay.

Alternative Payments Methods are expected to surpass card payments by 2017.

APMs accounted for 43% of global eCommerce transactions in 2012 and forecast to grow to 59% by 2017. As established markets reach saturation point, global eCommerce double-digit growth rates are being driven by the emerging economies --- where card penetration is even lower.

Online companies wanting to expand internationally should thoroughly investigate the potential of APMs, mainly for the following reasons:

  • APMs increase conversion. Using locally preferred payment methods is essential to balancing conversion with profit. By giving consumers access to their most familiar methods, merchants can win the trust and drive sales.
  • They're just cheaper. Most APMs offer better rates than cards, especially online bank transfer schemes.
  • There are no chargebacks. Most APM's transactions are non-reversible, meaning that no disputes can be initiated by customers --- the nightmare of any online business. This doesn't mean that you can't programmatically issue refunds, though, but it's up to you to decide whether the customer is eligible.

We've got you covered.

With Switch, we've created an abstraction layer on top of the existing rails along which transactions run to translate the messy and outdated technology behind hundreds of payment stakeholders (Acquirers, Processors, Payment Schemes). We then packaged our abstraction into simple and elegant libraries for most web and mobile programming languages.

Our unique single integration flow enables developers to plug into multiple payment methods in record time.

The beauty of our product lies in its flexibility. Unlike other offerings on the market, there are no iFrames or Plugins whatsoever---our client-side Switch.js library lets you control every pixel of the experience. We even dynamically provide you with the most relevant payment methods based on your customers' market, so you can keep your checkout page simple and drive conversions up.

It's been more than 20 years since the first secure online purchase, and today the eCommerce phenomena have had a dramatic economic and social impact worldwide, enabling innovative business models and services that have fundamentally changed the way we live.

We're excited to be able to take part in the next chapter. For now, we'll be actively adding new payment methods to our platform and expanding into other markets.

Stay tuned for more news.



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