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

If you’re an e-commerce seller, there’s an important statistic you should know: online shoppers are 70% more likely to finalize 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 the fast expanding “buy now, pay later” services are expected to quadruple by 2026².

Add in the fact that, if you’re selling to international markets, 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. 

THE PAYMENT OPTIONS YOU SHOULD BE CONSIDERING

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 the population³ – 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 buyer and seller reassurance that their transactions are secure. Many shoppers are also incentivized to spend on credit cards to have access to their bank’s reward programs.

Tip:

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.

DIGITAL/MOBILE WALLETS

Digital and mobile wallets (also known as eWallets) accounted for 44.5% of global e-commerce payment transactions in 2020, but by 2024, this share is set to increase to 51.7%, making it the most popular online payment method worldwide⁵.

Digital wallets act like a prepaid credit account, storing the customer’s personal data and funds. This saves them the hassle of inputting all their bank account details to complete an online purchase; instead they 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 conclude the purchase.

At this point, it’s worth looking at the leading causes of e-commerce cart abandonment:

It’s clear that long and complicated checkout processes, and users having to create an account, are responsible for many customers abandoning their purchases altogether. This is why digital wallets are your saving grace, allowing customers to check out quickly using an already existing account.

Digital wallets are particularly handy for those shopping on mobile, where a smaller screen can make the prospect of filling in multiple details particularly unappealing.

5 digital wallets to boost your conversion rate

1.PayPal

One of the most popular digital wallets, PayPal⁷ had over 400 million registered accounts as of Q2 2021⁸, meaning your customers are likely to be familiar with it. It allows users (on both mobile and desktop) to send or receive payments across the globe instantly by simply entering their email address and account password. With a presence in over 200 countries, it’s a must for e-commerce businesses selling to international markets.

Research has shown that websites with PayPal checkout convert at an 82% higher rate than those without it⁹.

2. Amazon Pay

It wouldn’t be a complete e-commerce article without a mention of the sector’s giant, Amazon. Amazon Pay¹⁰ is the marketplace’s online payment processing service. Third-party retailers can let their customers checkout with their Amazon Pay account to save them having to fill in lengthy payment details.

Considering 93% of mobile shoppers already have an Amazon account¹¹, the appearance of the Amazon Pay button at your store's checkout connects your site with a name your customers already trust.

3. Apple Pay

If your customers are shopping via mobile, chances are it’s on an iPhone, thanks to the device’s dominance of the market. Thus, it makes perfect sense to offer Apple Pay¹² at your checkout. It uses fingerprint or facial recognition, making it one of the most secure digital wallets out there, and the convenience to your customers of checking out with a single touch or glance means they’re less likely to abandon their purchases. Apple Pay comes ready installed on Apple phones, iPads, watches and anything else that uses the iOS operating system.

4. Google Pay

Let’s not forget Android users. Google Pay¹³ allows them to make payments online and in-app with Android phones, tablets, or even watches by connecting to the payment cards they have on file in their Google Accounts. As with Apple Pay, there are no fees for merchants – a significant advantage over PayPal and Amazon Pay which do charge.  

5. Alipay

Alipay¹⁴ has created several local versions of its digital wallet service tailored for various global markets by opening up technology to local partners. With over 1.2 billion users worldwide¹⁵, that number alone should be reason to sign up.

It is the most popular digital wallet service in Asia, and has a particularly strong presence in China. Consumers from the Chinese mainland can use Alipay in 56 overseas markets, so the payment platform is a must for any online retailer looking to sell to the thriving Chinese market.