An increase in digitally native brands over the last decade has accelerated the need for all ecommerce sites to quickly adopt modern technologies and stay current with ever-changing trends, especially in the payment space. Consumers expect and demand a simple, secure, and easy-to-use checkout experience, and are quick to abandon the conversion journey if it is subpar.

When ecommerce first began to grow in popularity in the 2000s, there was an immediate need for secure, simple, and trustworthy online payment technology. PayPal was quick to pioneer this business model, grabbing early market share and becoming a household name with 100 million accounts by 2006. PayPal recognized that in the early days of ecommerce both consumers and companies needed a solution that reduced the risk of fraud and allowed an easy user flow.

As PayPal nears its 23rd anniversary, everything has changed and yet nothing has changed. While the options and preferences for payment methods have exploded, the need for simplicity and security remains the same. With the COVID-19 pandemic hastening the growth of ecommerce sales, it is more important than ever that online merchants evaluate their payment methods and ensure their consumers are satisfied.

As you consider the best ways to grow your business and look to evaluate new payment types as a driver for growth, keep the following top of mind.


Payment Types

When it comes to ecommerce there are three primary payment types that are expected to be widely available, because not every payment method is right for every person. Be aware of who your customers are and what payment methods will resonate most with them. Sometimes offering the right payment method at the right time to the right person is the difference between making or losing a sale.

Wallets (Apple Pay, Android Pay, Google Pay):

  • Check your site visitors’ traffic source. For example, if a large majority of your traffic is on mobile iPhones, consider adding Apple Pay.
  • Younger consumers are more likely to use mobile payments. If your brand is targeting younger demographics, adding one or more of these payment methods could result in significant revenue opportunities.

Cards (Visa, Mastercard, Discover)

  • If your consumers are in North America, it is usually sufficient to take just Visa and Mastercard. But be aware that European consumers have completely different payment needs than North American consumers, often with different popular payment types by country. For example, in France, Carte Bancaire is the most widely used, and it will be hard to break into this market online without taking this payment type.

Buy Now, Pay Later (Afterpay, Affirm)

  • Gen Zs are less likely to have credit cards than Millennials and Gen Xers. If you are targeting this group, a buy now, pay later option can be essential to growing sales, especially if your average order value is in the $100-$200 range.


Implementation & Operations

The other thing you should consider when looking at payment methods is how you will operationalize them. Often, you will need a new implementation for each payment type, which can become costly and time-consuming. It is important to think through the process and level of effort, and understand the ROI (return on investment) before moving forward.

The cost per transaction will vary by payment method. It can range from 1% to 5% depending on the type of payment, who the merchant of record is, and how good your legal team is at negotiating new contracts. For any payment type charging more than 3% per transaction, make sure you have a clear business plan for incremental revenue growth.

Merchant of Record: Some payment methods, like many popular buy now, pay later options available today, take on the responsibility of being the merchant of record. This reduces the level of effort on behalf of your organization, especially when it comes to fraud, but will mean a higher percentage fee associated with each transaction. Before signing up for any payment methods where the payment company is the merchant of record, make sure that this payment type will have a significant impact on incremental revenue.

Implementation: What is the level of effort for implementation? Does your commerce platform have a history of implementing this payment method and how much development is required to get it up and running? For payment methods where a third party takes on the responsibility of being the merchant of record, they may be willing to cover all or part of this cost.

Payment authorization windows are often limited to 30 days by most credit cards, but sometimes are even shorter for certain payment service providers. If you are selling custom or back-ordered products, make sure your payment solution can handle a longer authorization window. If you are offering a subscription service, this will require a different type of payment implementation and agreement to process.

Tax: Do your chosen payment types collaborate well with your chosen tax software?

Fraud: If you are the merchant of record for that payment type, how are you routing the payments through your fraud check system? Some payment service providers, like Stripe, have fraud checks built into their system and even use automation and AI (artificial intelligence) to reduce the level of effort on the business.

Financial Reconciliation: Does the payment service provider or payment method offer adequate reporting for your finance team to reconcile each month? Can you directly route the data you need into your OMS (order management system) or will it require more manual intervention? The more payment methods you add, the more complex the reconciliation process can be on your finance team. Make sure you keep them in the loop and truly weigh the pros and cons to your entire business, not just the top-line revenue.


Implementing additional payment methods on your website can be a great driver for incremental revenue growth. However, they can be complex and time-consuming to implement. Understanding both the opportunity with your audience and the cost and level of effort on your internal teams is essential before choosing to move forward.

If you’re looking to take the next step in improving your payment options, schedule a meeting with one of our commerce experts to determine what your customers want from your brand and how to make it happen.

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