Offering the right mix of payment methods can impact your ability to attract and retain customers. Almost 1 in 10 consumers cited a lack of payment methods as their reason for cart abandonment. More than two billion people now shop online worldwide, so convenience and flexibility have become top priorities for consumers.
Merchants who don't provide diverse forms of payment risk missing out on sales. But with an increasingly complex global payments landscape, you should consider regional preferences and customer experience, as well as operational considerations like fees and security, when setting up your e-commerce store.
Providing the right payment methods
Whether your customer is shopping in-store or online, having the right payment method enhances the shopping experience. In brick-and-mortar stores, this might include accepting debit cards through tap or swipe options, while for online purchases, providing digital wallets or bank can cater to different preferences.
When a customer selects a payment method, a series of processes are initiated:
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Customer selects a payment method
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Payment data is encrypted and sent
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A payment processor verifies the information |
Payment is approved and the customer notified |
Customer funds are transferred to the merchant |
Types of payment methods
Credit cards
When the credit card is used in-person or online, the payment gateway sends the information to a payment processor, which then communicates with the customers' issuing bank to verify the financial transaction. If approved, payment is sent to the merchant and the customer pays the balance on their credit card invoice later.
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Pros |
Cons |
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Wide reach: Accepted globally and used for billions of transactions a year. Global growth: In certain markets such as India, the number of credit cards in circulation is increasing. Customer convenience: Offer ease of use, rewards programs and fraud protection. |
Transaction fees: Transaction fees can eat into profits, with fees usually ranging between 1.5% to 3.5%. Chargebacks: If a customer disputes a charge, the business could face a chargeback, which can be costly to resolve. |
Debit cards
Debit cards are a widely used payment option that draws directly from a customer's bank account or e-money account when making a purchase. While they can also be used to make online payments, they're tied to the available balance in the bank account. This makes them a popular option for those who prefer to avoid debt or interest charges.
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Pros |
Cons |
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Lower transaction fees: Compared to credit cards, debit card fees are generally lower. Wide acceptance: Debit cards are globally recognised and accessible for a broad range of customers. |
Not ideal for large purchases: Consumers might hesitate to use debit cards for expensive items due to the immediate deduction from their accounts. Insufficient funds: If a customer doesn't have enough money in their account, the transaction will be declined. |
Bank transfers
Bank transfers are a payment method where funds are directly transferred from a customer bank account to a business bank account, bypassing third-party credit card networks. They're widely used for large transactions, bill payments, and in regions where credit card penetration is lower. Unlike credit or debit card payments, bank transfers move money directly between financial institutions.
Types of bank transfers
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Pros |
Cons |
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Lower transaction fees: Domestic bank transfers generally have lower fees compared to credit cards. Security: Bank transfers occur directly between banks, minimising fraud risk and keeping payment details private from third parties. Ideal for large transactions: A common payment method for B2B transactions or expensive consumer purchases like real estate or cars. |
Slower processing time: Bank transfers, especially international ones, can take several days to clear. Customer inconvenience: Requires manual initiation, which can discourage customers. International fees: Cross-border transactions often incur high fees for currency conversion and processing, which can cut into profitability. |
Cryptocurrencies
Cryptocurrencies like Bitcoin, Ethereum, and stablecoins offer a fast, decentralised way to transfer funds directly between parties, bypassing traditional banks. Transactions are verified on the blockchain and usually completed within minutes, making them ideal for quick, secure payments. With global adoption growing, some online businesses are turning to cryptocurrencies, especially for cross-border transactions, thanks to their speed and lower reliance on middlemen.
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Pros |
Cons |
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Low transaction fees: Typically lower than credit card payments or international bank transfers. Faster cross-border payments: Transactions are processed in minutes. No chargebacks: Once a transaction is confirmed, it can't be reversed. Access to a global market: Cryptocurrencies aren't tied to any specific country or currency. |
Price volatility: Cryptocurrencies can fluctuate dramatically in value. Limited consumer adoption: Although growing, crypto use is relatively niche. Regulatory uncertainty: They operate in a relatively new and evolving regulatory environment. Security concerns: While the blockchain itself is secure, crypto wallets and exchanges can be vulnerable to hacking and theft. |
Digital wallets
Digital wallets and mobile payments like Google Pay (linked to a Google account), Apple Pay and PayPal, store users' payment information securely on their smartphones or computers, allowing them to make quick, contactless payments online or in-store. Instead of entering card details every time, users simply choose their digital wallet at checkout, and the wallet encrypts and transmits the payment details to complete the transaction.
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Pros |
Cons |
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Convenience: Quick payments with just a tap or click. Security: Encryption and tokenisation make transactions more secure. Global use: Digital wallets are widely accepted for both online shopping and in-store purchases. |
Adoption rates vary: Although gaining popularity, their uptake is slower in some regions or demographics. Device and regional compatibility: Customers with older devices or in unsupported regions may not be able to use certain digital wallets. |
Buy Now Pay Later (BNPL)
An alternative payment method, BNPL allows customers to split the full purchase price into instalments, often without interest if payments are made on time. BNPL services cover the full cost upfront for merchants, while customers repay the provider in manageable instalments over time. This makes BNPL an appealing option for larger purchases or those looking to budget more easily.
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Pros |
Cons |
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Bigger order value: May boost conversion rates and higher spend, as the immediate financial burden is reduced and instalments are usually interest-free if paid on time. Younger customers: BNPL services are particularly popular with younger demographics. Immediate payment: Merchants receive the full payment upfront from the BNPL provider. |
Fees: BNPL providers charge merchants a fee for each transaction, often higher than standard credit card processing fees. Customer overextension: Can lead to overspending, resulting in financial strain and returns. Regulatory scrutiny: As BNPL services grow, increased regulations may emerge, impacting how businesses can offer them. |
Subscription services
When a customer signs up for a subscription service such as Netflix or Spotify, they authorise recurring payments. Subscription management platforms, like Stripe Billing, help businesses handle renewals and cancellations, offering a steady revenue stream, while customers benefit from ongoing access and often lower rates compared to one-time purchases.
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Pros |
Cons |
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Predictable revenue: Merchants benefit from recurring income. Customer retention: Reduces the need for one-time sales efforts. Convenience for customers: Automatic billing simplifies payments, and customers appreciate continuous access to products or services. |
Churn risk: Churn rates vary by industry but can be over 80%. Customer fatigue: Too many subscriptions can lead customers to cancel or avoid new subscriptions. Upfront setup: Businesses must implement subscription management tools and platforms. |
Cash
In markets with less digital infrastructure or customer preferences for physical currency, cash is still widely used. It's common in in-person transactions and for Cash on Delivery (COD), where payment for eligible purchases is made when goods are received. COD is more popular in regions such as Eastern Europe or where customer trust in online payment methods is low.
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Pros |
Cons |
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No transaction fees: Cash eliminates processing fees. Immediate availability: Payments are received instantly. Familiarity and trust: Cash is universally accepted and trusted, particularly in regions with low digital adoption. |
Handling costs and security risks: Storing and transporting cash can be costly and increases the risk of theft or loss. Lack of traceability: There's no digital record, complicating accounting and fraud detection. Inconvenient for remote transactions: Not feasible for online or long-distance purchases. Lack of protection: There are few recourses to recover funds if cash is lost or stolen. |
Benefits of digital payment solutions for merchants
Offering a variety of digital payment solutions – from mobile payments and mobile wallets (like Google Pay) to debit cards and contactless payments – can provide significant advantages for merchants.
Region-specific payment preferences
Region-specific payment preferences vary significantly, with digital wallets like Alipay, dominating in China and Southeast Asia, while cash, though declining, remains popular inLatin America and the Middle East. In Europe, there is a growing reliance on account-to-account (A2A) payments like SEPA, whereas credit cards and debit cards still dominate in North America.
Selecting the right payment method for your business model
Choosing the right payment methods for your business depends on several factors.
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Factor |
Why it matters |
Examples |
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Customer preferences |
Offering the payment methods your target customers prefer increases conversion rates. |
Digital wallets in APAC, debit cards in Europe |
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Transaction costs |
Different payment methods come with varying fees that can affect your bottom line. |
Credit cards tend to have higher fees than A2A transfers |
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Security features |
Payment methods should provide strong encryption and fraud protection to safeguard transactions and customer data. |
Digital wallets offer advanced security such as authentication |
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Regional availability |
Consider which payment methods are common in the regions where you operate or plan to expand. |
Alipay in China, SEPA in Europe, Pix in Brazil |
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Recurring payments |
If your business model involves subscriptions or repeat customers, ensure the payment method supports automatic billing. |
Recurly for subscription services |
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Integration with platforms |
Choose payment methods that easily integrate with your e-commerce or POS systems to reduce technical barriers. |
Shopify and Woocommerce integration for online stores |
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Settlement times |
Some payment methods offer faster settlement times, improving cash flow for your business. |
Real-time payments provide instant settlement, credit cards may take days |
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Refunds and chargebacks |
Easy refunds can improve customer satisfaction, but they also pose financial risks if not well-managed. |
Consumers can file chargebacks for credit cards; A2A transfers and cryptocurrencies reduce chargeback risk for businesses |
Offer global payment methods with Antom
When expanding your business globally or reaching new customers, the right payment method can maximise conversion and reduce cart abandonment. At Antom, we offer a customisable online checkout supporting digital wallets, mobile wallets, online banking, cards, over-the-counter (OTC) payments, and national gateways – all designed to accept global payment methods seamlessly.
With a single integration that includes mobile wallets, 100+ currencies, and hundreds of payment methods, our solution caters to the diverse needs of different businesses. We also support subscription payments and auto debit, ideal for merchants with recurring billing needs.
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Boost conversion rates Having more payment options reduces friction and cart abandonment, leading to increased sales.
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Tap into new markets Enable global payment methods tailored to local market preferences so you can easily serve international customers. |
Connect with more buyers Provide multiple payment choices that cater to the preferences of a wide audience.
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Improve customer satisfaction Deliver a seamless, flexible checkout experience by supporting familiar and trusted payment methods. |
Expand your business with Antom's global payment solutions, designed to make reaching more customers easier than ever. Contact us today to learn how we can help you grow your revenue.