The new ways to pay: Latest payment methods for your online customers

Which online payment services should you be offering at checkout? It’s a decision that could be the difference between your customers completing or abandoning their transactions. In this article, we’ll help you understand more about increasing conversion rates with diverse payment systems.

If you’re an e-commerce seller, there’s an important statistic you should know: online shoppers are 70% more likely to finalise a purchase if their preferred payment method is displayed as an option at checkout¹.

That’s a significant number. By the time your customers have reached the payment stage on your e-commerce site, you’ve already done much of the hard work of engaging them with your brand. Yet, if you’re not offering an adequate selection of payment options, you risk losing a vast number of them at the final moment – i.e. the dreaded cart abandonment. 

To secure the most sales, you need to ensure your site has capabilities to support those payment methods which are most popular with online consumers. Of course, there are the obvious ones – think credit cards and Paypal – but global spending via “Buy Now Pay Later” services is expected to quadruple between 2021 and 2026². 

Add in the fact that international customers’ preferences for payment methods vary from country to country, and it can suddenly seem a little overwhelming knowing which ones to incorporate into your e-commerce checkout. Luckily, we’ve done the research for you…read on for a breakdown of all you need to know about e-commerce payment options. 

The Best Payment Methods For E-commerce

 1. Credit Cards

As an e-commerce merchant, you should be offering your customers payment by credit card as standard. Globally, credit cards are the second most popular payment method, preferred by over 22% of consumers³ – although their popularity is beginning to wane as more shoppers switch to digital wallets and Buy Now Pay Later options. 

As credit cards are regulated by compliance standards, they offer both the buyer and seller reassurance that their transactions are secure. Many shoppers are also incentivised to spend on credit cards to have access to their bank’s reward programs. 

Tip: Stripe for Credit Cards

Stripe⁴ is one of the market leaders for processing online merchants’ credit card transactions. It’s a fast and easy-to-implement payment method, and offers competitive rates for small businesses. The platform also has a wide range of additional features including a customer interface toolkit, financial reporting, and buy buttons for mobile apps.

Stripe⁴ is one of the market leaders for processing online merchants’ credit card transactions. It promises to increase conversions with built-in optimisations, access to 100+ payment methods, and one-click checkout. Furthermore, it supports cross-border transactions to 195+ countries and lowers the costs of multi-currency management.

The Rise of Digital Wallets: Convenience and Security

When it comes to mobile-friendly payment solutions for e-commerce websites, digital wallets (also known as mobile wallets) are a must-have. They are forecast to account for 54% of global e-commerce payment transactions by 2026, making them the most popular online payment method worldwide⁵.

They act like a prepaid credit account, storing the customer’s personal data and funds. It's quick and easy; users are redirected from the e-commerce site’s checkout to the digital wallet’s page where they can simply log in with their existing username and password to complete the purchase. This is particularly handy for those shopping on mobile, where a smaller screen can make filling in lots of details very frustrating.  

Digital wallets also benefit from encryption security which encodes debit and credit card details so the numbers are never shared with a merchant – making them a secure option.

4 digital wallets to consider

Buy Now Pay Later (BNPL) Options: Meeting Changing Consumer Needs

The BNPL sector’s growth has been astronomical – and it shows no signs of slowing down. The global market is projected to grow from US$30.38 billion in 2023 to US$122.19 billion by 2030 – a whopping CAGR rate of 22%⁷.

As inflation continues to squeeze economies across the world, paying for purchases in installments is an attractive prospect for budget-conscious consumers. Millennials and Gen Z are the biggest users of BNPL services⁸, so choosing the right BNPL service for your e-commerce site is an important decision. Research the most popular providers in your target markets and make sure you include them as options.  

3 leading BNPL solutions for your SME

3. Buy Now Pay Later Options

Buy Now Pay Later (BNPL) services are becoming increasingly popular with online shoppers, so if you’re looking to increase your conversion rate, they're worth considering. 

With global inflation and the cost-of-living crisis impacting consumers, it’s no wonder paying in installments is an attractive prospect right now. A recent survey¹⁶ found that this year, four in ten consumers plan to pay for their holiday shopping with a BNPL service. Gen Z will be the biggest users (48% of respondents), followed by millennials (47%) and Gen X (40%). In contrast, only 14% of baby boomers intend to pay this way.

The three most frequently cited reasons for using BNPL services are: 1) To avoid paying credit card interest; 2) To make purchases that otherwise wouldn't fit in my budget; and 3) To borrow money without a credit check^17.

In general, this is all good news for e-commerce merchants. BNPL incentivises customers to buy, boosts conversion rates, and increases average basket sizes by 20–30%¹⁸. It will also drive up your customer lifetime value – once your customers know you offer a BNPL option, they’ll come back to you for their next big-ticket purchase. 

Beware though, there are some downsides – namely, you’ll have to hand over a percentage of sales generated. You’ll need to do some cost scenarios to find out if the benefits to your business are likely to outweigh the fees.   

Let’s look at a few of the BNPL options out there: 

Optimising Your E-commerce Payment Strategy

Choosing the Right Payment Processor

A payment processor is a platform that manages the financial transactions between a merchant and a customer, from various channels including credit cards and debit cards. When a customer makes a purchase, the payment processor receives the transaction details, and requests authorisation from the issuing bank to ensure the customer has sufficient funds – and to verify their identity. The merchant account is then credited with the transaction amount. It’s a fast, seamless and secure system used by millions of SMEs across the world, every day.

There are many payment processors available – the most popular being PayPal – so your business should consider the following factors when choosing one:

Fees: these vary by payment processor; some charge a fee per transaction, others via a monthly subscription. There are also set-up and cancellation fees to consider, too.

Accepted payment methods: ensure the payment processor supports the payment methods your customers most commonly use, whether that’s credit cards, digital wallets, or BNPL.

International availability: if you’re selling cross-border, look for a payment processor that supports multiple currencies and popular local payment methods.

Customer experience: choose a well-known payment processor, and your customers will be reassured to complete the transaction at checkout.  

E-commerce Payment Processing: Three Takeaways

The more options, the better. Offer your customers a wide choice of payment methods at checkout and they’ll be more likely to complete the purchase. 

Customise for international customers. Do your research to find out the most popular payment method in the market you’re selling to. And don’t forget to ensure your e-commerce website defaults to the local currency when displaying prices. 

Keep it simple. “Guest checkout” and autofill will keep the checkout process quick and pain-free for customers.