Increase Retention and Extend your Runway by leveraging FinTech
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Increase Retention and Extend your Runway by leveraging FinTech

Katie Foos
Katie Foos
October 5, 2022
It’s no secret, especially in today’s financial climate, that businesses are looking to optimize the various payment methods they offer to customers. That’s why businesses are evaluating new and existing payment methods not only in terms of cost, but also in terms of performance.

Evaluating Payment Option Performance vs. Cost

Credit cards are the most commonly used payment option at checkout. While many people like and use credit cards for their loyalty programs and payment flexibility, not all customers have credit cards or want to use them. 50% of Millennials and Gen Z don’t have a credit card, either because they don’t qualify, or because they are conscious about not wanting to incur potentially high interest debt1. They also come with higher merchant processing fees - usually in the range of 2.9% + $0.30 per transaction, and they don’t offer merchants much in the form of driving incremental purchases or spend.

Debit cards serve as an alternative to credit cards, and they are usually cheaper to accept than credit cards, with a maximum rate of up to 0.5% + $0.21 per transaction. However, because they don’t offer much to customers in terms of rewards, they likely won’t result in incremental purchases or spend.

Buy-now-pay-later, or BNPL, companies have surged in popularity over the past few years, allowing customers to pay for purchases in 4 bi-weekly installments. Merchants can increase average order values and repeat purchases by up to 40% and 50%2 respectively, However, BNPL is typically used for purchases $100 and above and isn’t suitable for high-frequency purchases. Plus, merchant fees can cost up to 5.9% + $0.30 per transaction.

Venmo is becoming more widely accepted on food delivery and shopping websites, but many view it as a pure peer-to-peer payment platform to pay friends. Additionally, customers do not earn any rewards when they pay with Venmo, and merchant fees can be as high as 5%!

Enter Zage. Zage cuts out the payments intermediaries and allows customers to pay simply and seamlessly via ACH, while significantly reducing merchant processing fees. By building a rewards program that is fun, memorable, and keeps customers coming back, merchants can improve margins and customer loyalty amongst a very important group of Gen Z and Millennial consumers. Duffl, a grocery delivery service for college students, has seen an increase in average order values and reduction in merchant fees by up to 30% and 80% respectively, and the Duffl CEO stated that Zage has had a “disproportionate effect” on their unit economics!


To optimize your payment suite, be sure to offer a mix of options that meet your customers needs, increase performance, and reduce costs. Once you have a better understanding of which payment methods offer the best outcome, determine ways to best prioritize those options on your site.

Want to learn more? Contact Zage today!


  1. Millenial/Gen Z report
  2. Afterpay
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