With reports that South Africa's economy now officially in recession territory after two credit downgrades, South African online shopping sites may soon be forced to strip down their business expenses while adjusting to changing consumer spending habits.
The country's uncertain economic and political environment has resulted in fewer consumers willing to whisk out their credit cards. And, when consumer confidence drops, businesses should take immediate action to improve their sales performance while reducing costs. One way eCommerce sites can be more effective in boosting productivity is by leveraging revolutionary and cost-effective online payments in South Africa.
Investing in a payment solution that is aligned with your business objectives as well as the needs of the consumers can help online businesses successfully manage their cash flow. This is where offering multiple payments can help seeing as your target customers all have different expectations and behaviour patterns.
If you only process card payments online, you are missing out on much-needed sales and only increase your cart abandonment rate. Remember that not many customers are willing to use a credit card in tough economic times and would prefer to do make EFT payments instead. A range of payment options gives your business access to more potential customers, helping you to stay afloat in the competitive market.
That being said, enabling credit cards as part of your alternative payment offering opens up your business to cross-border eCommerce. According to the Cross-border Ecommerce Report – South Africa, 30% of Nigerian cross-border shoppers have purchased goods from South Africa in the past 12 months. To tap opportunities like this, it's essential that businesses partner with global acquiring banks and offer a localized checkout experience, (such as displaying prices in consumers' local currency). Connecting with customers across borders enables an eCommerce store to extract profits from flourishing markets.
Finally, by making use of a payment gateway that also accepts EFT payments, online businesses can negotiate more competitive servicing fees. Eft payments are usually more cost-effective because the transaction is charged a flat fee rather than a percentage of the total amount. Businesses can enjoy cash-flow benefits as they will have quicker access to funds. The risk of payment disputes is also lower with EFT payments that with credit cards. In a difficult economic landscape, this is a great savings strategy that will ensure your business maintain a healthy cash flow.
With South Africa's economy experiencing a post-downgrade slump, online businesses need to adjust to the changing markets to beat the competition. By providing your customers with flexible payment options, your business will have a better chance of prospering during tough times.