The impact of COVID-19 is likely to be felt by New Zealand retailers and shoppers for the foreseeable future.
Investing in your Shopify store, or an eCommerce store on any platform, is critical. Something that’s often missed is considering the payment preferences and circumstances of your customers . The default position of offering credit card facilities only needs to be challenged.
Here are 9 extremely good reasons why retailers should offer more than just credit card payment options in their website.
1. Many shoppers don’t have a credit card (or don’t want to use one)
1 million+ adult Kiwis don’t have credit cards. That’s about 25% of the “banked” population who can’t purchase online from you! And, if we do have a long-lasting recession it’s likely that people will be even more thrifty and less willing to use credit cards to buy things
2. Even if customers do have a credit card, they often choose non-credit card payment options
According to research 40% of customers in New Zealand who use POLi have a credit card but chose to use POLi to pay.
So it makes sense to offer customers the choice as they’re more likely to purchase from you if you offer a debit payment option.
3. Customers don’t like paying credit card surcharges
According to EFTPOS, Merchant Service Fees charged by credit card schemes naturally eat into profits. So many New Zealand retailers have a choice to make: apply a credit card surcharge or increase prices across the board.
Whilst this is completely up to the retailer, it’s important to remember that while some consumers won’t mind paying a surcharge, many will resent it.
POLi fees are substantially less that credit card so make sure you offer them a non-credit card payment option without a surcharge.
4. People prefer to use their own money
We’ve been using cash, Internet Banking and EFTPOS in New Zealand for a long time. Shoppers are very used to the idea of paying for something using their own funds. In fact there’s 4 debit payments for every credit payment in the wider econmony, so as a nation we actually prefer to pay this way.
So, it doesn’t take a large leap of the imagination to see why shoppers would prefer to pay for things online in the same way.
5. You can improve your profit margins
Credit card schemes charge retailers a Merchant Service Fee (MSF) every time a customer makes a credit card purchase on their website. And there’s gateway fees as well.
Fees for debit payment solutions like POLi are significantly cheaper so the retailer can enjoy better profit margins.
6. It’s easy to do!
It’s easy to set up additional payment options in your Shopify store. With POLi, it is literally a 2-minute job.
7. You don’t need to open a merchant bank account
Merchant facilities from your bank can be a confusing business, especially for new or smaller online businesses. (Read the chapter on Merchant Bank accounts in our Guide to Payment Gateways).
Some payment solutions, such as Paypal and Stripe, provide a Merchant facility as part of the solution but this comes at a high transactional cost.
Direct bank transfer services, like POLi, bypass the need for a Merchant facility completely. All you need is a bank account to receive your funds into.
8. The funds go directly into your bank account
Debit payment options usually cut out the middleman. The funds are transferred to your bank account instantly. Which is good for cashflow and makes reconciliation easier.
9. More people are shopping online
According to the 2019 New Zealand eCommerce review conducted by NZ Post, the growth in online shopping in 2018 was driven largely by existing shoppers increasing their shopping frequency and their basket size.
However, COVID-19 has resulted in a 156 per cent year on year rise in online retail sales (as of 19 April 2020) – the highest the statistic has been in 2020 so far.
If these numbers continue over the coming weeks and months, it’s likely that we’ll experience a growth in the number of people shopping online as well. You stand to get a greater share of these shoppers if you offer a debit payment option.
POLi is a major eCommerce payment solution used by more than 950 Shopify Businesses throughout New Zealand. It is a trusted payment solution used by over 1.2 million Kiwi’s in the last two years.
Zyber has partnered with POLi to make it even easier for our Shopify customers to increase sales. Right now, POLi is offering all Shopify businesses their lowest-ever fee at just $0.50 per transaction max.*
* Special pricing excludes GST and applies until the end of Covid-19 level 2 restrictions. See our standard prices here.