What are payment methods?
Payment methods are different ways in which purchasers pay, and merchants accept payments for the products and services.
With the rapid development of financial technologies and e-commerce, there are now more than 200 different payment methods used for online and offline purchasing worldwide. Along with the advent of the new methods of payment, the older ones usually become faster and more secure.
What are the types of payment options?
There are two payment method types – traditional and alternative. The traditional methods of payment are:
- credit & debit cards;
- direct debits;
As we stated above, the new payment formats keep emerging, and they are called alternative payment methods or APMs.
Alternative payment methods
Alternative payment methods represent all the payment types carried out without cash or major bank cards. They distinguish the three main groups of APMs:
- Wallet-based solutions include mobile payments and digital wallets, like PayPal, ApplePay, GPay, etc. These payment methods are quite popular now due to their security and convenience.
- Bank, wire, or credit transfers, when money is transferred from a person’s or entity’s account to another via online banking. Such bank payment methods are also quite popular.
- Pre-paid cards or accounts in traditional Visa and Mastercard or other card systems.
Customers tend to use APMs to pay for purchases online quite often. For instance, alternative payments make 49% of the total annual volume in Europe, the Middle East, and Africa and about 58% in the Asia-Pacific region. A business can lose from 20% to 30% of sales in these regions if it doesn't offer customers the preferred APMs. Supporting different ways to pay, including the alternative ones, can become a heavy advantage for your business expansion.
Payment options for e-commerce
The right choice of payment options allows businesses to increase the conversion and get more sales. Customers should be able to pay in their preferred payment methods. Otherwise, chances are they'll leave your site or abandon the cart without finishing their purchases.
Still, the “the more – the better” rule shouldn’t be applied here. Whether or not to choose a certain type of online payment or bank payment method should depend on your business specificity, its size, and customers’ geography.
One of the most popular payment options is card payments. Still, if you run your business in North America or plan to enter it, you should pay special attention to the support of e-wallet solutions. Shoppers all over the world are now widely using PayPal, Amazon Pay, ApplePay, and GPay. As our research showed, wallets' share in the US e-commerce payments is 30%. Almost every country has its own set of specific alternative payment methods their shoppers usually opt for.
Payment methods supported by Corefy
Corefy supports 400+ payment options that are used all over the world. Now our platform provides 150+ ready-made integrations with different payment providers and acquirers for businesses across the globe. We know all the ins and outs of payment processing and one of its crucial elements – routing. We are ready to share our knowledge and experience with you. Our team is ready to help you define what payment options are the most relevant for your business needs.
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