Online payment methods: Business guide to the best solution

Alex Morris

30 July

There are many different payment methods online for businesses and consumers to use. Some of these are traditional options you’ll already know well.

Others are recent developments from the digital world, which are already helping to change the way we pay. Alternative payment methods, as they're called.

Given the wealth of online payment methods available, it’s essential for your daily life to have an understanding of what they all offer.

And so, in this guide, we’re exploring how they can streamline your daily finances.

What are the methods of online payment?

There are many methods of online payment. Here are examples of popular online payment methods across the world:

Credit/debit cards.
Digital currencies (such as cryptocurrency).
Electronic check (eCheck).
Mobile payments.
In-app payments (online payment apps).
Bank transfers.
Recurring billing (subscriptions).
EMV/Chip card solutions.
Prepaid cards.
Digital wallets.
Merchant accounts.
Buy now, pay later instant financing.
Cash on delivery (COD).
Electronic bills.
Gift cards.

Over the last decade, the methods of payment online have provided businesses and consumers with increased convenience, flexibility, and security when sending and receiving money to others.

But the wealth of choice also makes it difficult to determine exactly which is the choice for you, either as a person or an organization.

So, how do you make a decision? We’ll help you out there.

What are the best online payment methods?

Okay, so what online payment services are there? And what should you use? This really depends on what you’re looking to achieve. Or how you want to approach your cash flow.

We’ve broken this down into two sections to separate consumers from businesses. Check the section relevant for you for the right approach.

The best online payment methods for businesses

You need to understand your target audience to choose the right payment methods for an online business. Consider the following:

Where are your customers based?
Do you have international customers?
How do your customers want to pay?
Are your customers open to new options?

If you’re a SaaS business, for example, you’ll likely want to run a subscription model with installments for regular customers.

But if you sell goods over an online retail store, then the likes of bank transfers, digital wallets, and via card will be better options.

Or you may want to use a virtual terminal to accept payments with a card. That way you don’t need a physical card to accept the cash.

You can also rely on a payment processor, which secures (and speeds up) online transactions between you and your customers.

This’ll allow you to open up a merchant account. It’s particularly effective if you accept global customers.

So, it all depends on the industry you’re in and who you’re accepting funds from.

Merchant account advantages

For online businesses, the benefits of having a payment processor are well worth your consideration.

With a merchant account, you’ll have a wide range of ways to accept funds online. This can provide you with many new opportunities to make your organization more streamlined.

Some of the main advantages include:

Accepting credit/debit card payments, which provides your customers with flexibility and familiarity.
Customer convenience, as they have greater flexibility with how they pay for your goods or services.
The payment process is much easier as you can create a checkout with a limited number of steps until they pay.
Greater security through a payment gateway.
An increase in your sales as you lower churn rates with streamlined options that suit your customers.
Greater customer retention as you make the user experience more enjoyable.

However, there are many more advantages and it’s possible to continue scaling up your merchant account to meet your business’ needs.

Should you have offline payment options?

If you think your business would benefit from offline payment options, then it’s absolutely a good idea to use them.

These methods can include:

Cash
Checks (the paper variety)
Bank transfers
Postal orders

If you think it’s a good choice for your business and can increase your revenue, then offer them to your customers.

The best online payment methods for consumers

Most consumers take a flexible approach to payments, using multiple options at their disposal.

So, you want to follow suit and use the likes of credit/debit cards, bank transfers, and a digital wallet.

Certainly it’s digital wallets that are becoming increasingly accessible and popular for consumers. Over the next decade, we can expect them to become the norm in on and offline payments.

But as for the best option for you, it really depends on what you feel comfortable and happy with.

Cards are still popular, for example, and bank transfers are easy and secure. So, mix and match to make the most of the ultra-fast and secure methods you have available.

What online payment methods should you use?

Okay then, what are the most popular online payment methods? This really depends on the industry and requirements of individuals.

There’s no clear #1 favourite, although credit/debit cards, digital wallets, and bank transfers are some of the most commonly used options.

For example, online shopping payment methods will typically rely on cards or digital wallets.

So, let’s have a final recap on the options you need. Ultimately, it depends upon your personal goals and the needs of your customers.

As a business, you want to ensure you’re providing the online payment methods your customers want to see. This may be a mix of old and new methods, such as credit/debit cards alongside modern digital wallets.

It’s essential you offer your customers the payment methods they want, otherwise your churn rate will increase. So, pay close attention to your industry norms to make sure you deliver the full range of suitable options.

Offer the right mix and you’ll soon crack the key to streamlining customers through your online checkout on your website.

As for the consumers of the world? Well, you can take advantage of as many online payment methods as you like to save time, enjoy greater flexibility, and to improve transaction security.