Financial Inclusion and Access to Digital Services
One of the primary benefits of alternative payment methods, such as mobile money or carrier billing, is the promotion of financial inclusion. By leveraging mobile devices and existing mobile network infrastructure, individuals who were previously excluded from traditional banking services can now access basic financial services, but also access digital content and services. This is as relevant as ever, considering that less than a quarter of the worldwide population (24%, according to the Findex Database of the World Bank) owns a credit card, while 63% (Statista) has access to a smartphone. This inclusion has the potential to drive economic, accelerate the digital transformation and empower the digital ecosystem, both in underbanked regions and in mature markets.
Convenience and Seamless Use
Alternative payment methods offer unparalleled convenience and ease of use. With mobile money or direct carrier billing, individuals can make payments and transactions with just a few taps on their mobile devices. This eliminates the need for complex banking procedures, making financial transactions more convenient, seamless, and secure. Many customers prefer using alternative payment methods because they offer a faster and more user-friendly experience compared to traditional payment methods, like credit cards.
Cost Savings and Efficiency
Digital payments through alternative methods can significantly reduce transaction costs for both individuals and businesses. Traditional banking services often come with fees and charges that can be especially impactful in low-income populations. Alternative payment methods, on the other hand, offer lower transaction fees. This cost savings can be particularly beneficial for merchants, enabling them to conduct transactions more efficiently and allocate resources to other areas of their operations. By avoiding the need to share sensitive credit card details directly, customers can feel more secure while making online purchases.
Enhanced Security and Fraud Prevention
Alternative payment methods leverage advanced technology to enhance security and protect against fraud. Mobile money platforms, for example, utilize encryption and authentication protocols to safeguard user transactions and personal information. Carrier Billing is also protected by anti-fraud systems, that make is secure to make online purchases. Additionally, mobile devices can be protected with extra security measures, such as fingerprint authentication or facial recognition, adding an extra layer of protection. These measures help build trust in digital payment systems and reduce concerns about fraud and identity theft.
Traditional payment methods may involve time-consuming processes like manual input of credit card details, leading to slower transaction times. Alternative payment methods often offer faster, streamlined processes, leading to quicker checkouts and reduced cart abandonment rates, thereby improving the overall customer experience. This is especially interesting for merchants, that can benefit from a better conversion rate (5 times higher), compared to traditional payment methods.
Global Reach and Cross-Border Payments
Alternative payment methods break down geographical barriers, enabling businesses to reach customers around the world without the limitations imposed by traditional payment systems. They often support cross-border transactions, allowing businesses to expand their customer base and tap into international markets easily. As businesses increasingly operate on a global scale, the need for payment methods that can facilitate cross-border transactions becomes crucial.
The Rise of Digital Commerce
The rise of mobile commerce has led to a significant demand for payment solutions that cater to mobile users. Alternative payment methods are well-suited for mobile devices, making them an ideal choice for the growing number of consumers who prefer to shop and pay using their smartphones or tablets. Also, the e-commerce industry has been experiencing exponential growth (user penetration will be 57% worldwide in 2023, according to Statista), and alternative payment methods have become essential in supporting this expansion. As online shopping becomes increasingly prevalent, businesses need to offer diverse payment options to cater to a wide range of customers.
All in all, these new payment solutions open doors to businesses and telecom operators to explore new revenue streams, while adapting to what users really need. If you are interested in knowing more about the topic, get in touch with our experts here and let them explain you in detail why you should embrace this opportunity.