How to choose the right payment method for your business

A 2024 survey by web UX research institute Baymard found that 13% of people will abandon an online purchase if their preferred payment method isn’t available. While this adds up to a significant loss of potential customers, the types of payment method customers expect to see can vary significantly depending on your industry and audience. It’s therefore important to make sure that you know your market when choosing which payment methods to offer. 

In this guide, we’re going to explore the importance of offering different payment methods before delving into the most popular options in more detail. We’ll then look at the key considerations you need to bear in mind when deciding which payment methods you should offer to find the right balance of customer expectations and business needs. 

The importance of offering different payment methods 

Offering multiple payment methods is vital for businesses in today's diverse and competitive market. It enhances customer satisfaction by catering to various preferences and needs, reduces payment barriers, and ensures smoother transactions. Businesses that provide flexible payment options are more likely to increase sales, build customer loyalty, and gain a competitive edge. 

The benefits of offering types of payment method include: 

• Enhances customer convenience 
• Increases sales opportunities 
• Reduces cart abandonment rates 
• Improves customer loyalty 
• Appeals to a broader demographic 
• Supports growth into international markets 
• Futureproofs business operations 

By integrating diverse payment methods, businesses not only meet customer expectations but also create a foundation for sustained growth and adaptability. 

Different methods of payment for your business 

To help you to decide which payment methods are right for your needs, we’ve put together an overview of the most common options available for businesses. Remember that you don’t need to offer all of them, but that having a variety of different types of payment methods can help to boost sales and increase brand trust. 

Here’s a list of payment methods we’ll be exploring, so you can navigate directly to any options you’re particularly interested in: 

1. Card payments 
2. In person or contactless payments 
3. Digital wallets 
4. Open Banking payments 
5. Alternative payment methods 
6. Phone payments 
7. Direct Debit payments 
8. Cash payments 

1. Card payments 

Card payments are the most commonly used payment method, making this an essential option for ecommerce businesses. The customer enters their card details at the checkout online, offering a simple, trusted payment method that can be used for one-off or recurring payments. Whether they pay by debit or credit card, the payment confirmation is immediate, increasing trust in your brand. 

Using an online payments platform that enables your customers to save their card or payment information ensures a frictionless experience that can encourage repeat custom. While it’s important to offer card payments, it’s important to research which card schemes you should accept to meet the needs of your customers. 

With Access PaySuite, you can accept payments from all major debit and credit cards, including Visa, Mastercard and American Express. You can also further protect your business by using 3D Secure and Amex SafeKey plugins to help reduce chargebacks. 

2. In-person or contactless payments 

According to UK Finance, contactless payments account for 66% of all credit card transactions, and 77% of all debit card transactions. This statistic has continued to increase over recent years, particularly in light of the COVID-19 pandemic and the UK’s ongoing move to becoming a cashless society. 

Chip and PIN is still valuable for many, but with fewer and fewer people carrying cash, it’s no surprise that contactless is such a popular payment method. By offering greater convenience and faster transactions, contactless payments benefit both businesses and consumers. That said, you may still wish to offer the choice to pay by cash when taking face to face payments so you never have to turn away good business. 

Access PaySuite empowers you to offer contactless payment methods to your customers via wireless or Bluetooth, providing in-person payments in store, over the counter or on the move with our range of card readers and card transaction solutions. 

3. Digital wallets 

E-wallets or digital wallets deliver fast, streamlined payment experiences that are easily accessible using mobile devices. By offering flexibility and convenience, this payment method drives high conversion rates, increasing transaction speed whilst also reducing fraud. 

Digital wallets store payment information, helping to increase conversion rates as customers don’t need to enter any additional information for future payments. This means that you can offer one-click checkouts, making it quicker and easier for customers to complete transactions and encouraging repeat purchases. However, despite wallets becoming more popular, there are still many people unwilling, or unable, to use anything other than cash and card. Continuing to offer these types of payment options supports your income streams and social inclusivity. 

Access PaySuite’s online payments solution includes Google Pay and Apple Pay for fast and convenient payments. These digital payment methods have a similar transaction cost to credit and debit cards, but are more secure as they require authentication to complete the payment, lowering the risk of fraud and disputes. 

4. Open Banking payments 

Sometimes called pay by bank, instant bank payments or account-to-account payments, Open Banking allows customers to pay by bank transfer, sending funds directly from their bank account to the seller. There are no cards involved, processing costs are much lower than for card payments, and funds are then transferred to the merchant immediately. 

Because of this convenience and the wide range of applications that it can support, adoption rates continue to increase for Open Banking. The latest Open Banking Impact Report shows that 13% of digitally active consumers and 18% of small businesses are using this payment method. Open Banking payments are fully compliant with Strong Customer Authentication (SCA) and don’t share credentials or account details with the seller, reducing the risk of fraud. Additionally, they don’t require compliance with PCI DSS standards. 

Access PaySuite offers Open Banking as a payment method for businesses and local government organisations alike, helping to reduce processing costs and provide more choice to consumers and citizens. 

5. Alternative payment methods 

Alternative payment methods (APMs) are those that aren’t made using cash or a card, and that don’t belong to a recognisable major card scheme, such as Visa, Mastercard or American Express.  

These different methods of payment are often cheaper and more convenient for customers, offering a frictionless way for them to make transactions when they don’t have access to standard payment methods such as debit cards. APMs include methods such as digital wallets, pre-paid cards, cash-based vouchers, and buy now, pay later (BNPL), and are more popular in certain countries, demographics and industries. If you’re looking to expand internationally, offering APMs that are widely used in your target region can help to increase conversions and improve customer experience.  

At Access PaySuite, we continually add to the number of APMs we offer, including GiroPay, TrustPay, Sofort, Boleto and Bancontact to name just a few. Each alternative payment method works slightly differently, but our one-time implementation gives you easy access to a wide, growing list of payment solutions. 

6. Phone payments 

Phone payments are when people pay for items over the phone by sharing their card details with the recipient organisation. This is done via a virtual terminal, allowing card details to be manually entered via a contact centre agent, or using automated processes such as touch-tone and voice recognition software. 

This type of payment method is called card-not-present, and can be really convenient for businesses. However, it’s essential that the system you’re using is equipped with the latest security features to meet Payment Card Industry Data Security Standard (PCI DSS) requirements. With over £570 million stolen through payment scams in the first half of 2024, you must be vigilant to protect your customers and your business from fraudulent activity. 

Access PaySuite’s phone payment solutions are fully regulated and secure, ensuring PCI DSS compliance. Whether you’re looking to take an occasional payment over the phone or offer full call-centre payment services, we keep your payments protected from fraud. 

7. Direct Debit payments 

If you’re a subscription model business, collecting regular instalments at the same time each month, then Direct Debit can help to ensure that you receive a regular cash flow from your customers. It’s easy to set up online, over the phone or face to face, and helps people who need scheduled, planned payments each month to budget.  

Unlike cards, there’s no expiry date for Direct Debits, and if your customer changes banks, their Direct Debits are taken with them. This means there’s no chasing new card details, so your business benefits from uninterrupted payments with zero additional admin. For your customers, they get the peace of mind that their payments are protected by the Direct Debit Guarantee, allowing them to claim back incorrect or unauthorised payments. 

Access PaySuite’s Direct Debit solutions make it easy to set up recurring payments for your customers, ensuring reliability and compliance at every step. With automated processes and secure data handling, you can save time and focus on growing your business. 

8. Cash payments 

Despite the rise in online payments, Open Banking and other alternative payment methods, there are many people who still use cash. It’s therefore important to continue offering this option to your customers, supporting your income streams and social inclusivity.  

Access PaySuite’s cash solutions allow your customers to pay for goods and services in local PayPoint and Post Office stores. You can even allow customers to checkout online and choose the option of completing their online purchase in person using cash at PayPoint stores.  

Advantages and disadvantages of different payment methods

To help you to better understand this list of payment methods and how suitable they are for your business, we’ve summarised the key points about each one in the table below. As well as the advantages and disadvantages of different payment methods, we’ve also included best use cases, security considerations and implementation challenges.

Choosing the right payment methods for your business 

Choosing payment methods that align with your business needs and meet consumer expectations is important for increasing sales and boosting customer satisfaction. Let’s look at some key considerations to bear in mind when choosing between different payment methods for your business. 

Industry 

Different industries have unique payment needs. For example, subscription-based businesses often rely on Direct Debit for recurring payments, while retail thrives with fast, flexible methods like contactless payments or digital wallets. Assess industry norms to make sure you offer what’s expected while staying competitive. 

Target market 

Your customer demographics, such as age, location and tech-savviness, will heavily influence their preferred payment methods. Younger audiences may favour digital wallets and Open Banking, while older generations might prefer cards or even cash. Understanding these preferences helps you to choose the right payment methods to meet the needs of your market. 

Transaction volume 

The volume and frequency of your transactions often dictates the most cost-effective payment method. High-volume businesses benefit from options with low per-transaction fees like Direct Debit, while those with lower volumes may be better off prioritising flexibility with cash, card or alternative payment methods. 

Customer preference 

Offering payment methods that align with your customers’ habits can improve conversion rates and loyalty. For instance, a global customer base may expect alternative options like PayPal or Klarna, while local shoppers may favor region-specific card solutions. Failing to offer a customer’s preferred payment method can lead to cart abandonment and lost sales for your business. 

Business needs 

Consider how your business operates and what it needs to function successfully both now and in the future. When choosing between different methods of payment, look at factors like scalability, integration capabilities and ease of payment reconciliation. A growing business may need a versatile solution that integrates with existing systems, while a small business might prioritise simplicity and low costs. 

ROI of each payment method 

Evaluate the costs of implementing and maintaining each payment method against the potential benefits. For example, options with higher transaction fees may deliver higher customer satisfaction and increased sales, making them worthwhile investments. Always try to balance cost-effectiveness with customer experience to ensure the best outcomes for your business and its customers. 

Bring all your different payment methods together 

Offering a variety of payment methods is essential for modern businesses to grow and thrive. From securing the most cost-effective transaction fees to delivering exceptional customer satisfaction and greater data security, there are lots of benefits to choosing the right payment methods for your needs. 

Providing a choice of payment methods and channels doesn’t have to mean complicated financial management. Access PaySuite’s multi-channel payments solution offers a single consolidated view that is easily integrated into multiple systems, allowing you to offer a variety of different payment methods without the additional administrative burden. 

To find out more about any of our payment methods and how they can help to grow your business, get in touch with our experts and they’ll be happy to help. You can also book a demo to see any of our tools in action for yourself.