Online businesses rely on various payment methods when it comes to processing transactions and receiving payments from customers. We can’t say they kickstart the development and adoption of those payment methods, but they certainly played a big role in shaping and improving them over the years. We can all look back and remember the revolution PayPal brought. It quickly emerged as a leading e-commerce payment platform, especially after its integration with eBay.
Online businesses have come a long way since those early days of e-commerce. With the ever-growing popularity of online shopping, the need for more efficient and secure payment methods is always there. PayPal paved the way for other payment solutions, so let’s make an overview of what is most commonly used in online businesses today.
Credit and Debit Cards: Still Most Popular
Without a doubt, credit and debit cards are still the primary payment method for online purchases. This is to be expected, as most people own a debit card, which makes it practical and convenient. Payment processing companies such as PayPal, Square, and Stripe have made it easier for merchants to accept card payments online, resulting in credit and debit cards becoming a standard for e-commerce transactions. The security measures implemented by card issuers and payment processing companies have also made them a trusted option preferred by many.Digital Wallets and Mobile Payments: Crucial For Certain Markets
Digital wallets are a step further in convenience and security. They allow users to store their payment information securely, making it easy to make purchases without having to re-enter credit card details every time. With that regard, mobile payments have been gaining popularity in recent years, especially in countries like China and India. This type of payment is particularly important for mobile-first or mobile-only markets. The advantage of mobile payment platforms is they can utilize direct carrier billing, mobile wallets, or both, so businesses can leverage a larger customer base and offer their services to people who don’t have traditional bank accounts or credit cards. Big tech companies like Apple with Apple Pay and Google with Google Pay certainly helped push the mobile payment market, opening the way to companies like Boku, Paytm, and M-Pesa. Some of these solutions have found their way to specific niches, so don’t be surprised to find Boku casino integrations, for example.Bank Transfers: A Secure Alternative
Bank transfers are still the safest and most commonly used payment method for large transactions and in B2B. They are also a preferred option for recurring payments, such as subscriptions or utility bills. Customers can set up automatic payments through their bank accounts, making it a set-up-and-forget solution. Bank transfers have their limitations so they are not as popular an option for e-commerce websites as credit cards or digital wallets. However, it’s worth mentioning that certain customers, like Germans for example, prefer bank transfers even for e-commerce transactions, so in Germany, you’ll find systems like Giropay being the most popular.Cryptocurrencies: A New Frontier
Cryptocurrencies like Bitcoin and Ethereum have been hailed as the future of online payments, but they have yet to gain widespread adoption. While some businesses do accept cryptocurrencies as payment, it is not a common practice among merchants. That’s unfortunate because cryptocurrencies do have their own set of benefits. They are decentralized, have faster processing times, and offer lower transaction fees compared to traditional payment methods. As more people become familiar with cryptocurrencies, we may see an increase in their usage for online purchases.Local and Regional Payment Methods You Probably Never Heard Of
Now something fun for the end. Depending on the business’s location, you might find some completely different payment methods from everything mentioned above. For example, Alipay and WeChat Pay are two of the biggest mobile payment platforms in China, with hundreds of millions of active users. But there’s a good chance you know of these. Want something more exotic? Well, there’s iDEAL which is the most popular online payment method in the Netherlands, for example, proving that local online businesses always adapt to their local markets and preferences. Ultimately, the most commonly used payment methods in online businesses come down to the consumer’s preferences which are often influenced by cultural, historical, and geographical factors.
