Choosing Payment Methods For eCommerce Store

8 min readJan 20, 2021

By Maryna Cherednychenko

The surge of e-commerce led to the rise of online payment methods. Modern users have become more tech- and digital-savvy. They are not afraid to pay for purchases on the website or in the app. Moreover, if there is no such possibility, they would prefer other, more advanced sellers.

Now there is a lot of noise around the payment gateway. This is probably one of the most popular searches on Google. However, the payment gateway itself is not a payment method but a mechanism that allows accepting some online payment types. In this post, we will review all possible types of payments for e-commerce so that you choose the ones of your preference.

What Is Online Payment?

Online payment is the ability to pay for goods or services on the Internet without using cash. Usually carried out directly on the website or in the seller’s mobile app.

Typically, the online payment algorithm looks like this:

  1. The buyer chooses a product or service.
  2. The seller sums up the purchases and issues an invoice.
  3. The buyer agrees to pay the bill and confirms this by entering payment details.
  4. The bank or payment provider confirms the buyer’s identity and the availability of funds to pay for goods.
  5. The seller confirms the purchase, and the bank or payment provider transfers money to the seller’s account.

What Are The Most In-Demand Payment Methods For E-Commerce?

Statista names the ten most in-demand payment methods and places less popular payment types in the “Other” category. The full list looks like this:

Most popular payment methods by transaction volume

Let’s review each payment type in more detail.

Digital Wallet

A digital wallet, aka electronic wallet or e-wallet, is a virtual payment instrument, software installed on a smartphone or computer. With it, you can pay for a product or service online or transfer money to a bank card to cash it out. A virtual wallet is analogous to a physical wallet. You can use it the same way as a regular wallet, only in electronic format. For instance, you can keep money and credit cards and use them for shopping in different stores.

To pay with an e-wallet in the e-commerce store, both the buyer and the seller must have the same wallet, for example, Apple Pay or Google Pay. The customer can transfer money from wallet to wallet as if they were passing cash from hand to hand. Note, for such a transfer, an Internet connection is required. Besides, they can pay with a card stored in the wallet. In this case, they will not have to enter card details when buying since the wallet will fill it automatically.

Digital wallet

Credit/Debit Card

Payment by card is very well-liked by online shoppers. It is enough to enter the card number, expiration date, and CVV code to make a purchase. The transaction security is ensured by the 3DS protocol, which uses two-factor authentication for a person’s identity. Here’s how it works: when you click “buy” on a website or app, you are asked to confirm the transaction in the mobile banking installed on your phone. You can use a code or biometric data such as a fingerprint, iris scan, or voice print to enter a mobile banking app.

On the one hand, card payment is more convenient than an e-wallet because a buyer does not have to register in a specific wallet. On the other hand, they have to manually enter the card number, which is not always convenient and safe if there are other people nearby. If we speak about the difference between a credit and a debit card, the only distinction is that the first one allows you to go into the red, while with the second, you can shop within the available balance.

Credit/debit card

Bank Transfer

Bank transfer means transferring funds from the buyer’s account to the seller’s account by entering account details. It is an old-fashioned way, which, however, is still in demand. As you can see, its popularity is marked by stability, and in the coming years, the bank transfer will keep its 9% in the total share of e-commerce transactions.

A bank transfer is most likely to be used by desktop users because it is inconvenient to enter an account number, company name, payment purpose, and so on on a tiny phone screen. Despite all the shortcomings, many users love the payment method for its clarity and security. By entering exact details, they can see who and why they are giving money to.

You should add the bank transfer to the list of payment methods to provide users with a wide range of options. If they are unfamiliar with e-wallets or wary of entering card details, they can always use the time-honored bank transfer.

Bank transfer

Charge/Deferred Debit Card

These cards are slightly different from traditional credit and debit cards. For example, a charge card has a much more extensive credit limit. But the terms of use require a person to return the full amount by a specific date.

The deferred card allows funds to be withdrawn not at the time of purchase, but after a certain period, for example, 1–2 days. At the payment due date, you must have the needed sum in your account. Otherwise, you will have to pay a fine.

For you, as a merchant, the mechanism for accepting payments through charge cards is no different from payments on debit and credit cards. As long as the card has the supported payment system’s logo, like Visa, AmEx, or MasterCard, you can accept payments.

As for the deferred card, you should consult your payment provider to clarify if they support such postponed payments.

Cash On Delivery

Cash on delivery means the buyer pays for the goods at the post office upon receipt. They have a chance to inspect the parcel and refuse payment if the product does not meet expectations.

Even though cash payments are becoming increasingly irrelevant, with only 2.7% of e-commerce transactions expected in 2023, you should not ignore it. By allowing paying for the order upon receipt, you show confidenсe in your goods’ quality and guarantee on-time delivery. This approach builds trust in a brand and helps increase the number of loyal customers. If users have a good experience with your company when paying in cash, they are more likely to switch to more advanced payment methods, such as credit card or e-wallet payments, in the future.

Cash on delivery

Buy Now, Pay Later

As the name implies, this payment method allows the buyer to receive the desired product right away but pay for it later. Moreover, two options are possible: to pay installments or the full amount within the established deadline. How to implement this solution in an online store? The easiest way is to partner with specialized services. The most known “buy now, pay later” apps are Klarna and QuadPay. They allow users to buy on credit with no interest.

Once you connect the service, your customers select it as a payment method during checkout. As a seller, you will receive the entire amount at once, and the buyer will repay the debt to the third party service of choice. Thus, both sides benefit.


PostPay is very similar to buy now, pay later. It also has some common features with the cash on delivery option because the buyer pays after receiving the order. In an e-commerce environment, merchants can arrange post payments using third-party services. Such services pay for the purchase immediately and charge buyers later. For example, Afterpay transfers money to the seller’s account after purchase confirmation. When the buyer receives the goods, it sends the invoice. The buyer can pay for the goods within 14 days or return them without paying.

Buy now, pay later

Prepaid Card

It is another card type that allows you to pay for purchases within the available limit. A prepaid card differs from a regular credit or debit card because it is not linked to a bank account. The user can replenish it through an ATM or transfer money from another card.

If you want to accept prepaid cards in your online store, you should consult with your payment provider. Most systems, such as PayPal or Stripe, support payment with such cards if they have a logo of international payment systems — Discover, American Express, Visa, etc.


Prepayment is suitable for merchants who sell custom-made products. By making an advanced payment, the buyer confirms their serious intentions and readiness to pay the order in full when delivered. To protect yourself and the buyer, you need to draw up a contract and prepay conditions correctly. Besides, you should develop a return policy. We recommend that you consult with a lawyer before enabling the prepay method on your website or mobile app.


Other Payment Methods

Other methods may cover cryptocurrency, e-checks, and local payment systems.

Cryptocurrency payments are very beneficial for sellers because the commission is much lower compared to the usual currency. Also, the buyer cannot revoke the order because a refund is not possible. To enable such payments, you need to connect a payment gateway that supports cryptocurrency.

An electronic check works similarly to a paper check. It contains bank details and the amount to be debited. Using this data, the payment provider sends a request to the buyer’s bank. In one-three days, the funds are transferred to the seller’s account.

Local payments cover all the methods described above only in local format. For example, Alipay is a preferred e-wallet in China, and Carte Bancaire is a popular payment card in France.

Paying with cryptocurrency

Offer Multiple Payment Options

By offering a variety of payment options, you expand your user audience. Some people choose to pay by card; others prefer electronic wallets; still others want to pay upon receipt. Deliver as many payment methods as you can and thus show your customer service is at its best. If you need help in integrating online payments, contact our managers. At Softensy, we have vast experience in working with e-commerce companies and enterprise solutions. We know how to add a payment gateway and which provider to choose. If none of the off-the-shelf solutions suits you, we can offer the development of a custom system.

This article was originally published at Softensy




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