The 6 Best online payment methods for E-commerce
The choice of payment method in an online store is a crucial aspect that can affect the company’s billing, as much as the quality of the product or the design of the website.
In fact, many times the payment method can be the determining factor in the customer’s purchasing decision and be an obstacle to closing a sale .
Among the most popular E-commerce payment methods are virtual POS, bank transfers or payment in installments . However, it is important to keep in mind that each online payment method has its own advantages and disadvantages, and what works for one online store may not work for another.
Below we list the best online payment methods currently due to their popularity.
1. Payment Gateways
Currently, payment with a credit or debit card is the most used E-commerce payment method to buy online. Most online stores have implemented this payment method thanks to its simplicity and speed.
Through a payment gateway, the buyer uses their credit or debit card number, which navigates encrypted to the store where the purchase was made through an SSL or TLS system.
The payment gateway, in turn, contacts the seller’s bank platform and sends it the card details to process the payment securely.
Through payment gateways, e-wallets such as Google Pay, Amazon Pay, or Apple Pay , among many others, can also be set up for customers who prefer not to provide personal financial information online.
For more information about the functionalities of each payment gateway, you can review the article, the 10 best payment gateways for Ecommerce .
2.PayPal
The main advantage of PayPal is that it is an easy and quick online payment method to activate .
In addition, PayPal guarantees the privacy of customer information, since it is not necessary to provide any information about the credit or debit cards associated with the accounts.
However, it is important to note that PayPal has one of the highest transaction fees on the market ( 2.90% + flat fee ), which can affect the profitability of the business in the long term. Also, their refund system is not always on the seller’s side.
Overall, PayPal is one of the most popular online payment methods , especially for small businesses.
3. Cash on Delivery Payment
The online cash on delivery payment method is an option that was very popular in the early days of electronic commerce, especially among those customers who did not have access to a credit or debit card.
With this remote payment method, the customer makes the payment in cash upon receiving the product at their shipping address, which offers greater security for the customer, since they do not have to provide personal financial information online.
However, in recent years this payment method has become less and less used, as there is a greater risk of returns or cancellations of orders since payment is not made until the product is delivered.
In some local businesses with an online store, it may still be an option to consider to attract certain customers.
4. Payment in Installments
Payment in installments or financing is one of the most popular Ecommerce Trends today, especially in those online stores in which the average purchase ticket is high.
It allows customers to make larger, more expensive purchases without having to pay full price right away.
Instead, the customer can pay for the product in installments over a set period of time, which may incur interest or finance charges for the customer.
This payment option is very attractive to reach those customers who do not have enough money to pay the full price of a product at once.
Additionally, paying in installments or financing can help increase sales and customer loyalty by allowing customers to purchase products they otherwise couldn’t afford.
It is important to ensure that the customer fully understands the financing terms and conditions before accepting the offer.
The Klarna payment method is the most popular installment payment solution. Its operation is what is known as “Buy now, pay later .” It is widely used around the world, with more than 90 million users.
Other online payment methods in installments that may interest you and that you have surely come across as a payment method in online stores are Aplazame or Sequra .
5. Bank Transfer
Bank transfer is one of the oldest payment methods and is still used in some e-commerce sectors.
Despite being a payment method with a slower process than other forms of online payment, it is especially useful in B2B business models , in which an advance payment is required, for example, if you manufacture a product and resell it to other stores for marketing.
Through a Pro-forma invoice , offering payment by transfer can help you market your products, by order volume.
If you decide to use bank transfer as an online payment method, be sure to provide clear instructions on the payment process, prices and shipping time , to ensure a satisfactory purchasing experience from your distributors.
6. Cryptocurrencies
Cryptocurrencies are based on cryptography to carry out transactions and have control of the new currencies that are issued . As a means of payment, digital currencies use blockchain technology to ensure the security of operations.
Regarding which currencies you can offer in your online store, the most popular Cryptocurrency is Bitcoin . Other currencies such as Ethereum can also be added as payment methods to an online store through the online platform where your digital wallet is located.
Although at the moment it is not a payment method widely used by businesses, online store creators such as Shopify already accept this innovative payment method, with integrations with Coinbase , Crypto.com , among others.
eCommerce Payment Methods
Finally, regarding Ecommerce payment methods, if you have an online store hosted on Shopify, you can configure all the payment methods mentioned above, through Shopify Payments , Shopify’s payment platform, with multiple advantages.
One of the features of Shopify Payments is that once set up, you don’t have to worry about integrating third-party applications or payment gateways.
The gateway automatically integrates payment with Visa, Mastercard, American Express, Discover cards and the payment services Apple Pay, Google Pay and Shop Pay.
Additionally, the Shopify dashboard allows you to access a detailed report on your online store’s finances and track orders and payments in one place.
On the contrary, you should keep in mind that if you do not use Shopify Payments, an additional fee will be charged for the use of third-party payment gateways , such as PayPal, Stripe or 2Checkout.
How to Choose the Best Ecommerce Online Payment Method
When choosing the best Ecommerce payment method, it is important to take into account several key aspects, such as the following:
- Security : The payment method must be secure and guarantee the privacy of the customer’s financial information. Don’t forget to include an SSL security certificate on your website.
- Convenience : The payment method must be easy and fast to use to ensure a smooth and satisfactory shopping experience for the customer.
- Costs : Evaluate the costs associated with each payment method, such as transaction fees, to ensure it is profitable for your business.
- Popularity : It is important to consider which payment methods are the most popular among your potential clients.
- Integration : The payment method should be easy to integrate with your eCommerce platform to ensure quick and hassle-free setup.
- Support : Make sure the payment service provider offers technical support and customer service to ensure a smooth payment experience for your customers.
Ultimately, it’s important to carefully evaluate each payment method and consider how it fits the needs of your business and your potential customers.
By choosing the best payment method for your online store, you can improve the customer’s shopping experience and increase sales and customer loyalty.
