From Credit Cards to Installments to Cash

You sell something and consumers buy it. Simple, right? Well, nothing is really simple with money and transactions. You need to know what your customers want to buy and how they want to pay for it. What type of payments should your business accept? You will want to accept major credit cards like Visa, MasterCard, Discover, and American Express. And of course, we have online shopping, where the world can shop on your website. How do you accept their payments? And consider that in many countries, computer use is far behind mobile phone use. So, if your customer uses mobile payment methods, do you accept those?

A Closer Look: Well, let’s look at one scenario using Mexico and how their citizens pay. Of the 128 million Mexican citizens, 18 million shop online, which makes it a great market for e-commerce. Culturally, Mexicans are used to paying for their products in installments. This is where the customer “purchases” the product, receives the product but makes installment payments to pay the balance of the purchase. This is especially popular for larger purchases.

Cash is King: In Mexico, 63% of the population is unbanked. Cash is the preferred payment method. In Mexico, this system works through a unique method. Your customer buys on your site. When a customer selects to pay in cash, they get a barcode. Then the customer takes the barcode on their cell phone (or print the barcode voucher) to any of the 30,000 associated locations and gives it to the cashier to make the cash payment. The payment is registered and the confirmation information is sent to the online store. Currently, about 35% of all e-commerce transactions in Mexico are paid with these vouchers. These vouchers are a way for customers to pay with cash.

With the barcode voucher or installment method, your customer can still buy online and pay in cash, thus expanding your pool of potential customers beyond those using credit cards. The world is becoming more dependent on e-commerce and this provides merchants an opportunity to expand their payment options accepting more global customers.

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