πŸ‘©β€πŸŽ“πŸ›’πŸ‘¨β€πŸŽ“ Overview of Ecommerce Payment methods

Payment methods setup

One of the most important aspects of e-commerce is the payment method used to complete the transaction. Depending on your business, you may not need all of them, but it is good to know your options.

πŸ’² Credit/debit cards are the most popular payment method for e-commerce transactions worldwide. They offer convenience and security, allowing customers to make payments without revealing sensitive financial information. However, they can be subject to high transaction fees and are not always available in all countries.

🏦Customers with an internet banking facility can do a bank transfer to pay for online purchases. The customer’s internet banking credentials are used to authenticate the bank transfer payment before a purchase happens. It is a secure way to transfer funds directly from a customer’s bank account to the merchant’s account. However, it can be slower and more complicated than other payment methods. This payment method is popular in Europe.

πŸ“±Mobile payments refer to any payment made using a mobile device. Due to our ever-increasing smartphone dependence, various ways were developed to allow consumers to pay using a phone. The popularity of mobile payments is increasing globally, and in many Asian countries, it is already the most popular payment method.
πŸ“±E-wallets are another popular payment method, particularly in Asia and Africa. Examples include PayPal, Alipay, and WeChat Pay. E-wallets allow customers to store their payment information securely and make purchases with just a few clicks. They are also often associated with discounts and loyalty programs.

πŸ’Ά Fiat, or physical cash, is a payment method often used for pickup in-store and cash-on-delivery transactions. It is prevalent in developing countries where most people don’t have access to banking and credit. Paying with cash does come with several risks, such as no guarantee of an actual sale during delivery, and the risk of theft is also high.

πŸ“œIn B2B, it is relatively common for business customers to β€œpay” via purchase order. The customers need to be approved by the merchant before paying with a purchase order is allowed. Setting up a credit limit is also a common practice. Merchants sometimes allow prospects to place orders via credit card while their credit application is reviewed.
When a buyer places an order, he has a term window (usually Net 30, for 30 days, or Net 60, for 60 days) to pay the invoice. In Europe, you can come across B2C sites that also use payment by Invoices.

Different Payment Methods are used around the globe, and there are no simple explanations for why the popularity of payment methods varies drastically between states. It is due to a combination of historical, political, and economic reasons.

When expanding your business internationally, it is vital to keep in mind that each country and region has its preferences regarding payment methods.

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