Posted by NationalACH on May 14, 2012

The number of online shoppers who pay using a credit or debit card is declining.  While alternative payments, such as electronic checks, are increasing.  In 2008, 85% of internet shoppers paid for purchases with cards.  But, by 2014, only 70% will pay with cards.  Echecks give merchants a way to capture orders from the 30% of shoppers do not have or do not want to use a card at checkout. Electronic checks give a buyer the option to pay for a purchase using a direct debit from a checking or savings account.  At checkout, the shopper enters account and bank routing numbers and funds are debited from the customer’s bank account and deposited to the merchant’s account. Over the past several years, the vast majority of Americans have begun paying bills online.  Because of this, shoppers are familiar with echecks and trust the payment option.  In a survey conducted for First Data, 46% of consumers said they frequently (33%) or occasionally (13%) use electronic checks or other direct debit transactions. Internet merchants that add echecks as a payment option are capitalizing on this trend and increasing revenues. Benefits of electronic checks include:

  • Sales lifts of 10-30%.  The reason is easy to understand.  The more ways there are to pay, the more sales will result.  Limiting payment options is a major cause of shopping cart abandonment at during checkout.
  • Expand customer base.  Only 72% of Americans have a credit card and only 77% have a debit card.  But, more than 92% of Americans have a bank account and can pay with an echeck.
  • Faster funding.  Electronic checks clear quickly and simplify accounting and reconciliation processes.
  • Reduced processing expenses.  Processing fees for eChecks save 50% or more compared to card processing.
  • Fraud protection.  Buyers are screened against a databases of bad checks and other risk assessment parameters. Transactions are approved or denied within seconds.

According to Cybersource, if consumers have to choose between two websites that offer the same product at the same price, more than 50% would buy from the merchant who accepts the payment option they wish to use.. And merchants that offer three or more payment options increase the rate of completed checkouts by 9% compared to sites that offer only one or two payment methods. In the increasingly competitive ecommerce world, merchants need to make it easy for customers to buy or risk losing a sale all together.  Adding electronic checks as a payment option gives buyers another convenient way to make a purchase.  Shoppers want the flexibility of deciding how to pay.  Echecks and other alternative payments will account for 30% of internet sales by 2014.  Don’t wait.  Start today.