There are a few must-have features for every eCommerce website, and topping the list is the ability to get paid. Without online payment methods, your business is like a shop with no cash register—impossible to make sales.
In the competitive online marketplace, having just one way to accept payments might do the job, but offering multiple options? That could be your secret weapon.
eCommerce businesses have multiple payment methods to choose from, each promising a smooth and secure checkout experience.
To help you reel in those sales, here’s everything you need to know about online payment methods, plus the top options available.
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What are Online Payment Methods?
Online payment methods are the unsung heroes of eCommerce—they work as gateways to process payment information for websites. Here’s why they’re essential:
They make the checkout process a breeze
Ever started buying something online only to abandon it because the checkout was a hassle? You’re not alone. The average shopping cart abandonment rate is about 70%, where shoppers abandoned their carts due to a complicated checkout process. A solid online payment gateway simplifies the process, making sure you don’t lose sales to something as simple as a clunky checkout.
They keep your customer’s info locked up tight
In a world where identity theft lurks around every digital corner, trust is everything. Customers need to know that their sensitive information is safe with you. Online payment gateways specialize in financial security, using encryption and other safety features to keep your customers’ details secure.
Why Offer Multiple Online Payment Methods?
Sure, one payment method is fine, but in today’s world, customers expect more. Services like PayPal, Square, and Apple Pay are so popular that customers want to use them everywhere they shop online.
These methods make it easy for customers to check out quickly, especially on mobile devices where more and more purchases are happening. The easier it is for customers to pay, the more likely they are to stick around.
Top Online Payment Methods to Consider
1. Digital Wallets and Mobile Payments
PayPal
PayPal is one of the biggest and most familiar online payment methods. The site has over 254 million users. That’s a lot of people who would have an easier time making a purchase on your website if you let them check out with PayPal. The service boasts that it’s currently used by over 17 million businesses and that customers who use PayPal to check out convert at 82% higher rates than other payment options.
That’s a pretty compelling reason to use PayPal. Luckily, adding a PayPal button to your checkout process is pretty simple (although you may need to work with a developer if you don’t use an eCommerce solution).
Amazon Pay
Paypal may be popular payment methods. But Amazon is undisputedly one of the most popular payment service providers across the whole web. And one that almost all your customers will have accounts with already. Adding Amazon Pay to your store can make it easier for Amazon customers to shop with you without having to key in their payment data in your checkout.
You’ll reduce barriers to purchase for hundreds of millions of customers, while also offering a payment option that the company promises has proven fraud protection. Amazon’s payment method works well on mobile devices, offering a seamless experience where it matters most.
Setting up an Amazon Pay button your website with their Express Integration option can take a matter of minutes. Or you can use their API, which takes a little longer, but allows you to customize the experience to better fit in with your website.
Google Pay
If anyone can compete with PayPal and Amazon for market share, it’s Google. The company now offers its own online payment method, Google Pay. Google says hundreds of millions of users already have card information saved to their Google accounts. This means Google Pay option offers added convenience for many people.
As with the other options, they promise an intuitive process on desktop and mobile and top-notch security through encryption.
Google Pay also lets retailers set up loyalty programs, digital gift cards, and deals for customers so everyone can skip the paper and plastic cards. It also works with PayPal and Visa Checkout for added reach.
Notably, they don’t charge you anything for using the service. It’s free for both you and your customers.
Apple Pay
For people who use Apple devices, and that’s more than 64% of people in the U.S., Apple Pay works as a mobile wallet when they’re out and about and a one-click payment option on websites that accept it. For mobile users, customers can even check out with Apple Pay by using their touch identification, but it doesn’t get much easier than that.
Apple Pay uses tokenization to keep credit card information secure. This simply means that once a user provides their credit card information to the service, the device communicates with the issuing bank to create a randomly generated number (or token) to represent that card. That obscures the information from hackers, keeping consumers’ financial data safe while working quickly.
You can set your website up to accept Apple Pay by using their API, as long as you already use one of the compatible platforms or payment service providers. Like Google, Apple’s payment gateway is completely free for both merchants and customers.
2. Stripe
Stripe provides a feature-rich payment processing platform that makes it easy to accept preferred payment methods from various sources. It includes credit cards, digital wallets, ACH transfers, and different currencies. They also provide a number of options for the checkout process. If you have limited coding skills, you can add their embedded checkout to your site with one simple line of Javascript, or you can create a more unique payment form with their custom UI toolkit.
Where some of the options we’ve looked at so far are primarily useful as an add-on checkout option, Stripe provides a good basis for other online payment methods to be added onto.
3. Square
While Square is mostly associated with in-person point-of-sale (POS) payment processing, the company also offers eCommerce options. They have an online payment API that accepts many of the payment methods we’ve included here (Google Pay, Apple Pay, Masterclass), as well as credit card payments.
In addition to payment processing, they offer an easy checkout solution that allows customers to set up profiles at the same time that they provide their payment information.
4. Verifone (formerly, 2Checkout)
2Checkout is now Verifone. It is a global payment processing solution that accepts payments from across the world in a number of different currencies. Verifone provides a customizable checkout that you can design and add to your website, extensive fraud protection, and a responsive design that ensures customers can easily check out across devices.
It also offers an API that makes adding the processing solution to your website fairly simple, while also providing the flexibility to customize it as needed.
5. Credit and Debit Card Payment Gateways
American Express
American Express might not have the market share that our first three online payment methods do, but it has something just as valuable: consumer trust. While American Express is not as ubiquitous as some its credit card competitors, it has one of the highest satisfaction rates in the industry and tends to target a higher-income consumer than other credit card companies.
As such, the people who would find an American Express checkout option attractive are likely to be some of the top visitors you’d want to attract.
They promise fraud protection, 24/7 customer support, and the flexibility to work with a number of payment processors and consider different add-on features. And they can accept over 120 currencies, so if you’re interested in attracting international customers, that’s a big benefit.
The catch, as you might expect, is that the option costs more than most of your other choices. But if you think you’ll have enough high-value customers likely to see a benefit in using the AmEx gateway to check out, the cost may be worth it though.
Visa Checkout
Like the payment gateway from American Express, Visa Checkout makes it extra easy for all Visa cardholders to check out on your website without having to fill in all their payment information. There are over 2 million people enrolled in Visa Checkout, so you’d be making the checkout process easier for a significant portion of your audience.
That convenience clearly makes a difference, since Visa’s data shows that offering Visa Checkout can increase conversions by 42%. The payment option includes advanced security features and easy setup options.
Masterpass
Mastercard’s Masterpass payment option is similar to those offered by American Express and Visa. It makes it easy for any Mastercard holders to quickly and easily check out from your website. And it provides the kind of advanced security in the payment process you’d expect from a credit card company including user verification, tokenization, issuer authentication, and fraud monitoring.
Mastercard doesn’t charge any fees to either you or the customer. And the company has developers available to help you get set up.
6. Bank Transfers and Direct Payments
ACH (Automated Clearing House) transfers and NetBanking are two efficient payment methods.
ACH transfers, common in the U.S., facilitate direct bank-to-bank transfers through a centralized network. It makes them ideal for recurring payments due to their lower transaction fees and strong security. However, they may take several days to process.
NetBanking allows a customer to make payments directly from the bank account without needing credit or debit cards. It’s particularly useful for large transactions and offers a secure and straightforward payment option. Integrating NetBanking with eCommerce sites is generally simple and supported by major payment gateways.
7. Buy Now, Pay Later (BNPL)
Buy Now, Pay Later (BNPL) services, like Klarna, Afterpay, and Sezzle, allow customers to split purchases into smaller, manageable payments, increasing accessibility and driving sales for merchants.
Klarna offers various payment plans, including interest-free installments, while Afterpay splits payments into four equal installments over six weeks. Sezzle provides similar flexibility, with an emphasis on financial education.
For merchants, integrating these BNPL options is straightforward and helps boost conversion rates by easing the immediate financial burden on customers, while ensuring upfront payment for businesses.
8. Prepaid and Store Cards
Prepaid and store cards, like gift cards and reloadable prepaid cards, offer flexibility and benefits for both customers and retailers. Gift cards allow customers to purchase preloaded cards for personal use or as gifts, driving sales and increasing brand loyalty.
Retailers benefit from immediate revenue and potential profit from unused balances. Reloadable prepaid cards provide added convenience for regular customers, encouraging repeat business and reducing chargeback risks.
These cards can be easily integrated into eCommerce platforms, with options for physical and digital formats, ensuring broader customer appeal and secure transactions.
9. Traditional Methods
Despite the rise of digital payments, traditional methods like cash payments and cheques remain relevant, particularly in certain regions and scenarios.
Cash, especially through cash on delivery (COD), is preferred in areas with limited digital infrastructure or where trust in online payments is low. While COD helps businesses reach a broader customer base, it also presents challenges, such as handling errors and non-payment risks.
Cheques, though less common in eCommerce, are still used for large transactions or by those cautious of digital fraud. However, they come with risks like bounced cheques and delays, requiring businesses to implement strict policies for processing.
10. Rewards or Points
Loyalty programs and rewards redemption are effective strategies for eCommerce businesses to foster customer loyalty and encourage repeat purchases. By offering points, discounts, or exclusive offers, loyalty programs tap into the psychological appeal of earning rewards, making customers feel valued and connected to the brand.
Commonly, customers earn points with each purchase, redeemable for discounts or products, and some businesses offer tiered programs to unlock higher rewards with increased spending.
Seamless rewards redemption at checkout enhances customer satisfaction by reducing perceived costs, potentially driving more sales. Clear communication and easy integration into the payment process are key to the success of these programs.
Things to Consider While Selecting Payment Methods
Here is what to keep in mind before you accept multiple payment methods:
Location: Consider the geographical preferences and access to payment options in your target audience’s region.
Purchase Mode: Determine if customers are shopping online, via mobile apps, or in-store, and choose relevant payment methods like digital wallets or mobile payments.
Business Model: Align payment methods with your business model, such as offering recurring payments for subscription services.
User-Friendliness and Integration: Opt for payment methods that are easy to set up and integrate with your eCommerce platform.
Security Features and Compliance: Ensure payment methods comply with industry standards (e.g., PCI-DSS) and offer encryption and fraud protection.
Support for Multiple Currencies and International Transactions: Provide options that support currency conversion and cross-border transactions for a global audience.
Speed of Transactions and Fund Settlement: Consider the transaction processing speed and fund settlement times to maintain cash flow and customer satisfaction.
Customer Support and Service Reliability: Choose a payment service provider with responsive customer support to handle technical issues, disputes, or concerns effectively.
How to Implement New Online Payment Methods
Integrating new payment methods into your eCommerce store can enhance the customer experience and potentially increase sales. Here’s a step-by-step guide on how to implement new online payment methods effectively:
Assess Your Needs: Before selecting a new payment method, evaluate your business’s needs and customer preferences. Consider factors such as the types of transactions you process, your target market’s payment preferences, and the features you require.
Choose Compatible Payment Providers: Select payment providers that are compatible with your existing eCommerce platform and can integrate seamlessly. Many payment service providers offer plugins or extensions for popular eCommerce platforms, which can simplify the integration process.
Test Thoroughly: Before going live with a new payment method, conduct thorough testing to ensure that it works correctly. Test different scenarios, including successful transactions, failed payments, and refunds, to identify and address any issues.
Optimize for Mobile: Ensure that the payment method is optimized for mobile devices, as a significant portion of online shopping occurs on smartphones and tablets. A mobile-friendly payment process can improve the user experience and reduce cart abandonment.
Update Your Checkout Process: Integrate the new payment method into your checkout process, ensuring that it is user-friendly and clearly visible. Consider offering multiple payment options to cater to different customer preferences.
Is It Really Worth the Time and Effort to Add New Payment Methods?
Short answer: Yes.
Bayard found that 19% of shoppers abandon carts because they didn’t trust the site with their card information, and another 8% said there weren’t enough payment options. Let’s do some quick math: out of every 100 shoppers, 70 will bail before finishing their purchase. But by adding more payment options, you could save up to 18 of those lost sales.
Sounds worth it, right?
If adding more options to your checkout process makes buying products from you faster and more convenient, you’re likely to see an increase in sales. So, the question may really be, can you afford not to add multiple payment methods?
Frequently Asked Questions
The three most popular payment methods are: card payments (credit or debit card), bank transfers (directly between bank accounts), and digital wallets (online platforms like PayPal or Google Pay).
Modern popular online payment methods include digital wallets like PayPal and Apple Pay, cryptocurrencies such as Bitcoin, Buy Now, Pay Later (BNPL) services like Klarna, and contactless payments using NFC technology for tap-and-go transactions.
The payment system refers to the infrastructure and processes that handle the transfer of funds between buyers and sellers. The payment method is the specific approach or tool used within that system, such as a credit card, digital wallet, or bank transfer.
The best mode of payment varies by region and consumer preference. However, globally, credit and debit cards are widely used due to their convenience and widespread acceptance. Digital wallets and mobile payments are also gaining popularity, especially in tech-savvy regions.
Online payments are processed through a payment gateway that securely transmits payment information from the customer to the merchant’s bank account. The payment gateway encrypts the data, verifies the transaction, and communicates with the financial institutions involved to complete the payment.
To accept free online payments, you can use payment services that do not charge transaction fees. For example, some payment gateways offer free services for basic transactions, though they may charge for premium features. Additionally, certain digital wallets and peer-to-peer payment systems may offer free transactions under specific conditions.
The safest way to accept payment involves using secure payment gateways that offer encryption and fraud protection. Implementing SSL certificates, ensuring PCI-DSS compliance, and using secure online payment methods like digital wallets can help protect both your business and your customers.
The different types of POS systems include traditional POS with hardware like cash registers, mobile POS using tablets or smartphones. And cloud-based POS, accessible online from any internet-connected device.
To avoid chargebacks, provide clear product descriptions, use fraud detection tools, maintain accurate transaction records, and offer excellent customer service.
Payment gateways transmit payment data securely, while payment processors handle transaction processing and settlement.
