The Exhaustive Guide to Online Payment Methods

Nowadays, it’s difficult to imagine a successful and rapidly growing business that doesn’t accept payments online. What’s more, simply enabling customers to make purchases via the Internet is not enough to ensure a smooth shopping experience. Modern consumers expect fast checkout, a variety of payment methods, frictionless transactions, and much more.

In this comprehensive guide, we will go over all the critical aspects of accepting online payments and help you navigate through all the nuances related to it.

The Advantages of Accepting Online Payments

Theoretically, even if you sell products and services in a web store, it would be possible to operate without processing payments online. For instance, you could get away with sending bills and waiting for a check in the mail. However, it sure does sound old-school, doesn’t it?

While offline payment methods still exist, they are being gradually replaced by their online counterparts due to the plethora of benefits the latter offer, such as:

• Access to a wider audience. When a merchant accepts online payments, it makes shopping at their store accessible for a large number of people.
• Optimized payment process. Paying online is extremely easy and can be done through a variety of devices, promoting a positive customer experience.
• The ease of setting up subscriptions and memberships. If your business is dealing with recurring payments, there’s nothing better than setting up an online subscription plan and ensuring comfort for both you and your clients.
• Faster receipt of funds. A lot of online payment methods these days get processed nearly instantly, relieving you from the need for the invoice to reach the client.

As you can see, processing online transactions is an advantage of its own. However, accepting a wide range of payment methods takes merchants a step ahead.

Why Offer Different Online Payment Options?

While some businesses can do just fine with a single payment option, the vast majority of merchants tend to implement more than one method. But why so?

Providing multiple payment methods comes with such practical benefits like:

• Geographical availability. Offering local payment methods alongside the globally recognized ones enables you to cater to an international audience effectively.
• Functional backup. It sometimes happens that a payment service goes down or becomes temporarily unavailable for some locations. Having several alternatives in your store ensures that your sales won’t come to a halt.
• Consumer satisfaction. Providing your clients with a mix of payment options makes them more satisfied with the shopping process and is known to boost retention rates.

Clearly, there are plenty of advantages when it comes to offering a good selection of payment methods. But which ones will your business benefit from the most?

The Most Popular Payment Methods in 2022

Here is an overview of the most used payment methods nowadays:

• Debit and credit cards - Bank cards are the most popular payment method worldwide and are typically offered as a default option on eCommerce sites. All that the customer has to do to use this payment form is enter their full name and details, such as the card number, expiry date, and CVV code.
• Netbanking - This payment method is also known as online banking or Internet banking. It is very similar to making a purchase with a bank card, with the exception that the consumer doesn’t have to fill in all the payment details. Instead, they log in to their online bank, and the sum gets debited instantly from their account.
• Direct debit - With this payment form, merchants get the consumer’s permission to withdraw money directly from their bank account on a specified date. In eCommerce, this method is often used for subscriptions.
• Digital wallets - E-wallets are becoming more and more popular, especially among younger generations. To conduct a payment with a digital wallet, the consumer has to link their bank card with a provider of choice (for example, Apple Pay, Google Pay, PayPal, etc.). After that, their details will be securely stored in the e-wallet, so the user won’t need to have a bank card at hand every time they wish to make a purchase.
• Buy Now, Pay Later (BNPL) - This payment method enables the merchants to receive the money for an order upfront, while the consumer pays for it in installments. BNPL became increasingly popular during the COVID-19 outbreak and keeps gaining prominence in post-pandemic times, so it’s good to offer it as an option at your store. What’s more, this online payment form tends to increase transaction values and boost conversion rates at checkout.

These are the most popular online payment methods used across the globe. However, it’s important to note that there is a wide variety of local and alternative payment forms, with new solutions arising on a regular basis.

How to Accept Payments Online?

There are two ways in which you could start accepting payments online:

• By setting up a merchant account and a payment gateway
• By partnering with an all-in-one payment processor

Let’s take a closer look at both of these options:

1. The “DIY” Method

If you are a do-it-yourself type of person and would like to set up your payment processing system from scratch, you will need to take care of two key elements:

• Merchant account. It is an online bank account that enables merchants to accept credit and debit card payments by temporarily holding funds until they are transferred to their business account.
• Payment gateway. This software will link your website to one or more of the processor networks. It allows your customers to submit their card details, notifies you whether the transaction is approved by the cardholder’s bank, and forwards your charges for settlement.

While this is definitely an option that you can opt for, there is a much faster and simpler way of setting up online payment processing for your store.

2. Collaboration With a Payment Service Provider

Realistically speaking, not every merchant has enough time to set up payment processing on their own. That’s why many business owners choose to turn to a payment platform provider for a ready-made solution.

What’s more, opting for a payment platform solution often means that you don’t have to worry about complying with the current regulations, such as PCI DSS (Payment Card Industry Data Security Standard), as you would not be storing sensitive customer information.

On top of that, you are most likely to be offered additional services to customize your payment solution, such as subscription billing, fraud management, and beyond.

A Full Range of Online Payment Methods On a Single Platform

The advantages of outsourcing a holistic payment solution are undeniable. However, not every payment platform has the capacity to offer a full package of services tailored to your business needs.

Payneteasy is today’s leading payment service provider offering a wide array of solutions for merchants, banks, PSPs, financial institutions, and more. We provide our clients from across the globe with payment software that is fast, secure, customizable, and easy to integrate.

For instance, our white label payment gateway is an end-to-end, ready-to-use, PCI DSS-compliant solution that will save you plenty of time, effort, and development costs, while offering a plethora of benefits like:

• Absence of iFrames and redirects
• 99.997% uptime track record
• 150+ customizable fraud filters
• Fast and easy integration
• Full technical support
• 3-D Secure verification
• Customer behavior analysis
• User-friendly back office

Our payment gateway supports a variety of payment methods, ensuring the most convenient shopping experience for your customers.

Reach out to us already today to start processing online transactions and increasing business revenues in no time!

FAQ

How to accept payments online?

To accept online payments, you will need two key elements: a merchant account and a payment gateway. While some choose to set them up on their own, others choose a faster and more convenient option - outsourcing a customizable payment solution, such as Payneteasy. With our white label payment gateway, you can start accepting online payments almost instantly.

What are the different payment methods online?

The eCommerce landscape features plenty of payment methods. Some of the most popular options are:

• Debit and credit cards
• Online banking services
• Direct debit transfers
• Buy Now, Pay Later (BNPL)
• Digital wallets

In addition, there is a variety of established and emerging local and alternative payment methods.

What is the safest way to accept payments?

No payment method is universally accepted as the safest one. However, you can rest assured that you are processing payments in the most secure way possible if you carefully follow up-to-date security standards and deal with service providers that are reputed and experienced. Payneteasy offers top-notch payment solutions with security as one of its key focal points.

Which payment method is most commonly used in online transactions?

Despite the fact that new solutions emerge continuously, bank cards remain the most popular payment method worldwide. According to research, on average, every adult person has three credit cards².

¹ - Baymard Institute - 48 Cart Abandonment Rate Statistics 2022
² - Forbes Advisor - 9 Interesting Credit Card Statistics