The 9 Best Online Payment Options for Your Business

Online businesses have unique needs when it comes to accepting payments—the payment methods must work remotely and must be able to provide immediate verification of funds. That automatically takes out options like cash, cheque, barter agreements (payment in kind), telephone payments and card-present transactions using a point of sale (POS) terminal.

However, while selected payment methods are best reserved for in-person transactions, e-commerce merchants have more options than credit card payments when it comes to online sales. Understanding the wide range of methods you can use for online payments and hosted solutions vs integrated payment gateways will help you make an informed choice.

Options as Far as Online Payments

The types of payment methods available to e-commerce merchants are much more diverse than they were 30 years ago. Rather than filling out a form with one’s card number every time, customers can now complete the payment process with a single click from their personal computer or mobile device.

According to an article in PR Newswire, offering multiple payment options can increase revenue by nearly 30%. These popular and emerging online payment methods represent the most commonly used methods today.

Debit and Credit Card Payments

Debit and credit cards are still the most widely used online payment methods around the world, accounting for 28% and 42% of online sales as of March 2017, respectively. Debit card processing fees are generally much lower than credit card processing fees because the customer is paying with his or her own money rather than funds borrowed from the card-issuing bank.

How to Accept Payments via Debit and Credit Card

To accept debit and credit card payments on your website, you can use a hosted solution, an API-hosted solution (like Unicorn Group) or a self-hosted payment gateway that you build yourself. Any solution that you use must be securely encrypted and PCI-compliant to prevent customers’ card information from being intercepted and stolen.

Mobile Payments

Mobile payments using Apple Pay, Google Pay, Samsung Pay and Amazon Pay represent the third most common way to make online payments. In 2020, mobile wallet payments accounted for around €4.1 million in sales worldwide. To make mobile payments, customers download an app and open an account that they then link with their credit and debit cards. To make a payment, the customer signs into the app using biometric authentication (such as their fingerprint) and taps on a button to authorise the payment.

How to Accept Mobile Payments

To accept mobile payments, you’ll need to follow the instructions provided by each mobile payment provider for your shopping cart solution. Sometimes, your shopping cart might give you the option of adding these online payment services automatically. Other times, you might need to copy and paste some pre-written code.

Other Online Payment Methods

These additional payment methods are less common than cards and mobile payments but they could still be worth offering, especially if they are popular with your target customers or country.

QR Code Payments

QR payment apps generate a QR code that customers can scan with a mobile device to pay using their chosen payment method. QR codes can be generated once with the merchant’s bank account details or for each individual transaction (with the transaction amount field filled out).

E-Cheque Payments

E-cheques work like normal cheques except that the customer enters the details into an online payment form and it’s processed much quicker than a traditional cheque. A merchant account provider can set this up on your e-commerce site.

Bank Transfers

To complete a (usually electronic) bank transfer, the customer transfers money from his or her bank account directly to the merchant’s bank account. Alternatively, the merchant can debit the customer’s bank account with pre-authorisation. Bank transfers are often low-cost or free and are sometimes processed on the same day.

There are several kinds of electronic funds transfer (EFT) payments that e-commerce merchants can use to receive funds:

• One-time bank transfers initiated by the customer – You provide your business bank account details to the customer and the customer transfers the funds.

• Direct debits authorised by the customer – The customer gives you his or her account details and authorises you to withdraw a specified amount as a once-off or on a recurring basis.

• A standing order initiated by the customer – The customer instructs his or her bank to transfer a specified amount to your account once or on a recurring basis. This payment method is especially popular in Europe.

Cryptocurrency Payments

Cryptocurrency payments are statistically most popular with males aged 25 to 44 years old and could be a good fit for your customer base if your target market includes a lot of young, tech-minded men. To accept cryptocurrencies on your website, you can look for a plugin offered by payment service providers that process them (such as BitPay, Coinbase Commerce or NOWPayments) or ask customers to contact you directly to pay with cryptocurrency straight from their digital crypto wallet to yours.

Buy Now Pay Later Payments

Buy now pay later (BNPL) arrangements allow customers to shop at your online store and pay for their purchases in four to six regular instalments. The BNPL provider covers the full cost of the purchase up-front, at which point it takes over the responsibility for charging the customer’s bank account or card. Offering BNPL can triple conversions with very few (if any) drawbacks for merchants.

Click-to-Pay

While not a payment method in itself, click-to-pay is a handy way to direct your customers to the checkout page. Using an email marketing plugin (check the email marketing plugins that are offered by your shopping cart solution), you can generate a payment button that you send to the customer in an email, electronic invoice or electronic bill.

Once the customer clicks on the button, he or she is directed to fill out a payment form and pay using one of the payment options offered. Once the payment is approved, a receipt is sent automatically to the customer’s email address as proof of a successful payment.

Hosted Solutions vs One-Stop Payment Gateway

When you accept payments online, you can either add each payment method separately (using code or a shopping-cart plugin) or process all of your payments through an on-site payment gateway that you build in-house or that’s managed by a merchant services provider.

If you have a registered business, there are several advantages to working with a merchant services provider when it comes time to accept payments online:

• An integrated payment gateway provides a streamlined checkout process for customers and greater opportunities for branding.
• Keeping customers on your website for payment reduces the likelihood of technical issues and cart abandonment.
• Processing payments through a single payment gateway allows you to collect and compile customer information for email marketing and credit participating customers with loyalty points.
• You will have the benefit of merchant services to help you manage and grow your business.
• You will be supported by a team of customer support professionals who will respond quickly to resolve any issues.
• You will be backed by the latest fraud protection software and chargeback mitigation tools.
• You can adjust your fraud scrub in real-time using your merchant dashboard to enable a higher volume of transactions for the gifting season or to allow a one-off payment from a trusted customer who’s travelling abroad.

Merchant Services Providers May Charge Less Than You Think

These days, merchant services providers work with a wide range of payment solutions—and many don’t even charge a setup fee or early termination fee. While you’ll usually pay something in the form of monthly fees, this usually translates to lower per-transaction fees and could even be waived if you maintain a minimum monthly processing volume.

When looking for an online payment service provider, look for one that supports the currencies that you usually use and the payment methods that your customers prefer. Then, read independent online reviews about the provider and ask for client referrals to make sure the company is legitimate and will provide you with the security and support you need.

Once They’re Set Up, Online Payments Can Help Your Business Grow

After comparing the best online payment methods together with their pros and cons, you’ll be ready to choose and integrate the ones that are most suited to your business type and customer base and start accepting payments on your site.

When comparing online payment service providers and options, remember to consider the total amount you’ll pay in fees (monthly fees are often balanced out by lower transaction fees) vis-a-vis the breadth of payment solutions supported and the merchant services that payment processor provides.

For most businesses, a dedicated merchant account with an API-hosted payment gateway offers the most flexible payment solution for customers and the greatest peace of mind for you.