Digital payments are transforming how retail business gets done.

It’s an exciting time to be in the payment industry where the dynamics are quickly evolving, as businesses and customers shift from cash to digital payment methods creating opportunity for innovation and growth. The rise of alternative payments coupled with the increased adoption of contactless payment methods, such as Apple Pay and Masterpass, means that retailers need to diversify their payment offerings to meet the demands of their customers.

The success of QR-based payments has greatly assisted with making customers comfortable with alternative payment methods, and the increase of in-store financing and micro-credit options utilising the mobile QR code payment mechanism will play a key role in boosting merchant sales and growing loyal customer bases. This trend of instant credit payments is already evident in the e-Commerce domain and will soon be felt in the physical store environment.

What are Alternative Payment Methods?

Alternative payments refer to the methods that are used as an alternative to cash, credit card and debit card payments. – these include digital wallets, instant EFT, and payment instalment options.

Emerging In-store Customer Credit Options

Shoppers, particularly millennials, are increasingly wary of accruing additional debt through high interest credit cards and are looking for simple, affordable, and flexible payment options. Retailers can provide their customers with access to numerous alternative payment providers, including in-store instant credit, to pay for goods and services, such as:

- Buy Now Pay Later (BNPL) – this is one the fastest growing payment methods globally and empowers retailers to provide their customers with a simple and flexible way to purchase goods and services immediately but pay in instalments over a specified period, often with no interest to the customer. The retailer gets their funds right away and the BNPL provider takes on the risk of securing the repayments from the customer.

- Purpose Based Lending (PBL) / In-Store Financing - a real-time lending product that enables customers to finance goods and services over either a short or long-term basis. As it is flexible, it helps when making higher value purchases or having to finance costly services.

- General Credit – a convenient once-off application credit facility that allows customers to shop at participating retailers. With a revolving credit limit, customers can spend whatever is repaid.

- Subscription Agreement – where the customer agrees to pay a fixed monthly subscription amount for an agreed subscription period to a service provider for the use of goods or services.

- Lay-By or Purpose Based Savings (PBS) – an interest free payment service allowing customers to save and pay for goods over time.

The payment experience is becoming a focus for retail innovation as it quickly fosters customer loyalty, boosts sales, delivers an enriched customer experience and ultimately differentiates a retailer against its competitors. By implementing QR payments, utilising existing payment hardware and infrastructure, such as Pin Entry Devices (PEDs), retailers can enable a host of alternative payment providers.

Adumo is South Africa’s largest independent payments processor trusted by retailers across Africa. Utilising our in-house platform, Innervation Mobile QR, we are enabling merchants for alternative payments through a single POS integration.

If you are a large multi-national, independent, entrepreneur or an online retailer, we have the technology and expertise to help you understand which Alternative Payment methods will grow your business.