Ask the expert on media: Can APMs alleviate friction in the US?

Today’s online media and streaming market is hypercompetitive. Video and music streaming platforms have changed how we relate to and consume media, and many other media providers are looking to make their mark on this evolving industry.

For merchants to win their share of this market, they need to consider offering more than just access to online media. And when your competitors are not far behind you, the real differentiator may be the experience you can offer customers from sign-up to payment.

The payment stage is a key part of the customer journey and can be improved through offering various flexible payment options, for example, to enhance the overall experience. Any friction in payments processes could cause customers to pause and change their minds before checking out.

So, how can media content brands reduce friction in online payments? The answer could be found in alternative payment methods (APMs).

How do Americans pay for online media?

While our habits around watching movies, listening to music and keeping up with the news may have changed rapidly over the past decade, payment preferences in America are still catching up.

Globally, digital and mobile wallets are used for 41.8% of e-commerce spending (up from 36% in 2018), while in the U.S., that number is only 24%. APMs, in general, are on the rise across the world and are expected to account for almost 70% of global e-commerce payments in 2022.¹.

When it comes to online media, though, APMs are gaining popularity in the U.S. After credit and debit cards, PayPal and Apple Pay are Americans’ preferred methods for paying for content (29% and 3%, respectively), our research found.²

While many Americans still prefer to pay with credit and debit cards, it appears that tides are changing. Seventy-three percent of respondents in our recent survey told us that they would be willing to use, or would only use, digital wallets to pay for their online media and subscriptions.² This is a significant consideration for media brands aiming to access an even bigger market.

Convenience is everything

When we asked Americans the reason for their payment preferences, 45% told us that convenience was the driving factor. Consumers are becoming more demanding and expect to have access to services and content as quickly and easily as possible.

American media consumers prefer to make one-click and in-app payments (39%) for their preferred service, as they offer speed and convenience. Such payment options remove much of the friction from the payment process, especially if the service allows customers to securely save their preferred payment methods for future spending.

Online media providers can leverage this ease-of-use to retain customers. For example, imagine if you had to manually re-enter card details every month to renew your video streaming subscription. No doubt, many of us would simply stop paying.

Customers expect their online experience to be seamless, including paying for the service, so businesses should consider making this the core of their customer experience strategy.² Offer multiple payment pathways, and you might see an increase in conversions and a reduction in insult rates (the number of customers who complain about a rejected order).

As a starting point, consider offering the most popular APMs on top of card payments, those commonly referred to as “the Pays”: PayPal, Apple Pay, Google Pay, Samsung Pay and Amazon Pay. These established brands are familiar to American shoppers (57% have used PayPal to handle payments or finances ). They satisfy customers with immediacy, accessibility, convenience and security.

Getting more from APMs

There is a wide variety of APMs and digital wallets, and more are emerging every year. We can expect services such as PayPal, Apple Pay and Google Pay to gain much traction in the early 2020s as people’s preferences shift towards a more digital experience. And with the increasing influence of Gen Z as a consumer group, we could see America’s more traditional approach to online payments changing dramatically.

But, with so many competing APMs, it can be difficult to decide which is best for your business and your customers. And even then, once you have made your decision, you will still have to implement it within your existing infrastructure.

Unlock APMs with Access Worldpay to meet customer demand. You’ll discover a simple, fast integration to scalable services and rapid, safe, data-driven product enhancements on a global scale. Access Worldpay delivers exceptional service quality and the latest payment products to help you maximize global acceptance and make it easy for your customers to pay in their preferred way.

Speak to us today to learn more about offering APM services.