Payment Methods in E-Commerce
Ecommerce is expanding exponentially around the world, and customers’ expectations for fast, secure checkout experiences are on the rise. To meet customer needs and reduce cart abandonment rates, businesses must offer multiple payment methods on their websites.
Credit and debit cards remain the most prevalent ecommerce payment options worldwide; however, other types such as cash on delivery (COD) remain highly prevalent in some regions while e-wallets have grown increasingly popular over time. Online retailers should understand their target customers’ preferences and needs regarding different forms of payments available so they can select those most suited for their business.
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Credit cards are one of the most accepted forms of eCommerce payment and can be used at almost any website. Merchants need a merchant account and payment gateway connected to a processing network in order to accept credit card payments, while customers needing to use this payment method must provide their full name, card number and card verification value (usually found on the back).
Debit cards are another popular eCommerce payment option that allow customers to use money already held in their bank accounts to make purchases online. In order to process a debit card payment, customers must provide details including name and address along with amount they would like spent; once submitted the money will automatically transfer from customer’s bank account into merchant’s.
PayPal is a digital wallet that enables customers to pay for goods and services with their personal or business accounts, in a secure, simple and easy way online. PayPal allows customers to buy from various merchants by creating accounts with them before linking their bank or credit card to their PayPal account before selecting this as the payment method when checking out.
Bank transfer is another popular payment option in e-commerce that enables customers to move funds from their personal bank accounts directly into merchant bank accounts. While bank transfers remain secure and reliable payment methods, their popularity has slowly decreased with customers opting for other online payment solutions such as debit and credit cards instead.
Prepaid cards are another popular method of e-commerce payment that can be found both physically at retail stores and online, where customers purchase them loaded with money they can then use when shopping online or at physical retail locations. Prepaid cards provide a safe alternative to debit and credit cards but require customers to trust retailers with keeping their financial details confidential, which may dissuade some shoppers. Nonetheless, this trend has seen exponential growth throughout Europe, particularly following PSD2 legislation which will permit non-banks access to similar payment systems used by major card networks allowing non-banks use the same systems used by major card networks allowing non-banks access.
