A guide to payment methods

This guide helps you understand the importance of payment methods and how to decide which ones to offer based on your business model and customer preferences.

Last updated on Dec 17, 2021
  1. Introducción
  2. The benefits of payment methods
  3. Choosing the right payment methods for your business

As online tools make it easier to connect with global customers, more and more businesses are selling overseas. In fact, a Stripe study found that 70% of online businesses are selling internationally today. While it’s easier than ever to reach a global audience, online businesses are also faced with a new challenge: How do you address the diverse customer preferences of a global audience during the checkout experience? The way customers prefer to pay for goods or services online varies drastically based on where they are located. If you don’t create a relevant, familiar payment experience, you could cut off entire countries from your addressable market.

While the global payments landscape has become increasingly complex and fragmented, Stripe makes it easy for any type of business anywhere in the world to discover and accept popular payment methods with a single integration.

This guide helps you evaluate and identify the payment methods that are well-suited to your business model and customer preferences and offers an in-depth look at the payment methods Stripe supports.

The benefits of payment methods

Over the past decade, payment methods have evolved to support different consumer and business needs. Markets with high card penetration, such as the US and the UK, have seen a significant shift towards wallets like Apple Pay and Google Pay, which offer more security and convenience. Some markets, such as France and Japan, even have their own local card networks that help businesses reach more card users. In markets like Germany and Malaysia, where card use is much lower, bank-based methods are strongly preferred and trusted for online purchases. The banking networks in these markets typically offer a faster and more secure checkout experience where users can authorize a payment using their online banking credentials. Meanwhile, in economies with a large unbanked population, such as Mexico and Indonesia, popular payment methods allow customers to pay for online goods with cash using vouchers.

These graphs show how payment method preferences vary across countries

By accepting payment methods that are both preferred by your customers and relevant for your business model, you can:

  • Reach more customers globally: As you expand into new regions, accepting local payment methods may be necessary to capture the total market opportunity. For example, 54% of online transactions in China involve wallets such as Alipay or WeChat Pay, and 20% with the local card network China Union Pay. Without supporting these payment methods, you may risk missing out on the substantial and growing buying power of Chinese consumers.
  • Increase conversion: Up to 16% of shoppers abandon their cart if their preferred payment option isn’t available. Surfacing the right mix of payment options to customers can meaningfully increase the chances that they’ll successfully complete a purchase.
  • Reduce fraud and disputes: Anticipate and manage the risks associated with accepting online payments by choosing payment methods that match your risk preferences. As a general rule, the better the level of customer authentication, the lower the likelihood of fraudulent and disputed payments.
  • Optimize your transaction costs: Payment methods have inherently different cost structures. Depending on your business model and where your customers are located, certain payment methods may or may not be relevant.

Choosing the right payment methods for your business

Whether you want to improve conversion in your domestic market or expand globally, surfacing relevant payment methods to your customers is key. But, depending on the nature of your transactions and where your customers are located, certain payment methods may or may not be relevant.

This section covers the seven major payment method families and specific considerations based on your business model: e-commerce and marketplaces, on-demand services, SaaS and subscription businesses, or professional services. If you are a B2B platform that enables your users to accept payments, your relevant payment methods depend on the business model of your users (for example, if your users have a SaaS business model, refer to the SaaS and subscription businesses section).

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