With the rise of mobile wallets, autopay subscriptions, and other convenient payment methods, customers expect to make online purchases quickly and easily. Nearly one in five US shoppers abandoned a purchase recently because checkout took too long. Accelerated options like Shop Pay, on the other hand, boost conversions by up to 50%. It’s critical for businesses to remove any friction when it comes to payment.
But because different customers have different preferences, this puts the onus on business owners to be able to accept payments in many different formats. Learning how to set up your business to accept multiple methods will go far in keeping your customer base happy and spending.
Today’s purchasers pay for goods and services using 11 principal payment types. Here’s a list of the most common payment methods, including their advantages and disadvantages.
The most popular payment methods
Eleven of the top types of payment methods that ecommerce retailers should be well aware of include the following:
- Credit and debit cards
- Cash (COD)
- Mobile wallet
- Buy now, pay later
- Checks
- Bank transfer
- Autopay
- Cryptocurrency
- Rewards or points
- QR code payments
- Digital payment links
| Payment method | Processing fees | Speed of payment | Disputes/chargebacks | Best use cases |
|---|---|---|---|---|
| Credit and debit cards | 1%–3.5%, depending on card type and provider | 1–3 business days to settle | High: chargebacks are common | Everyday ecommerce checkout; higher AOV purchases |
| Cash (COD) | No processing fees | Instant for merchants (upon delivery) | Low: once collected | Markets where COD is preferred; regions with low card penetration |
| Mobile wallets (Apple Pay, Google Pay, etc.) | Similar to cards (~1%–3%) | Instant authorization; 1–3 days to settle | Medium: tied to card disputes | Mobile-first audiences; fast checkout online or in-store |
| Buy now, pay later (BNPL) | Higher merchant fees (2%–8%) | Merchant paid upfront (provider assumes risk) | Provider handles disputes | Younger demographics; higher-ticket items; flexible installments |
| Checks | Bank fees may apply; processing terminal costs | Slow: can take several days to clear | High risk of fraud/bounced checks | B2B orders; larger custom orders; legacy customer bases |
| Bank transfer (ACH, wire) | Flat fees ($15–$50 for wires; minimal for ACH) | Slow: 1–5 business days | Low: funds move directly between banks | Large B2B purchases; international orders |
| Autopay (recurring billing) | Standard card/bank fees apply | Automated on billing cycle | Medium: customers may dispute unexpected charges | Subscriptions, memberships, recurring services |
| Cryptocurrency | Network fees (variable, can be low) | Fast: minutes to hours | Very low (irreversible) | Tech-savvy audiences; international sales avoiding FX fees |
| Rewards or points | Indirect: affects revenue, not fees | Instant redemption | Low: non-monetary credits | Loyalty programs; driving repeat purchases; customer retention |
| QR code payments | Similar to underlying method (card/wallet/bank) | Fast: real-time confirmation | Medium: same as method linked | Pop-ups, events, offline-to-online shopping |
| Digital payment links | Standard processing fees for linked method | Fast once clicked; settles as card/wallet | Medium: links can be disputed if misused | Social selling, invoices, D2C orders outside a storefront |
1. Credit and debit cards
Credit and debit cards are one the most common payment methods, especially for online stores.
Credit card companies, including Visa, Mastercard, American Express, and Discover, extend credit to purchasers. Credit card companies cover the purchase price, and customers pay their card balance every month.
Debit cards do not extend credit to a purchaser but deduct money directly from the purchaser’s bank account.
Customers simply enter their payment details, like card number and billing address, directly at checkout.
Advantages of credit and debit card payments
Credit cards allow customers to make large purchases even if they don’t currently have much cash. This may benefit retailers, as shoppers tend to spend more with credit cards than when paying with cash.
Debit cards limit spending to the funds in a customer’s bank account, and offer convenience and security, as consumers won’t have to carry large sums of cash in their wallets. And, it’s often faster than bank transfers or checks.
Disadvantages of credit and debit card payments
The biggest disadvantage is the payment processing fee credit card companies levy on merchants, typically as a percentage of each transaction.
Most debit card fees stay around 1% of the purchase price or less, but some credit cards can charge a merchant up to 3.5% of the purchase price.
Additionally, there is a lag from the purchase to the amount appearing in the merchant’s bank account, which can vary depending on the payment processor. This is in contrast to cash, which is immediately available after the sale.
2. Cash
Cash payments are the most traditional payment method. They occur when a customer hands paper or coin currency to a merchant.
Believe it or not, some ecommerce merchants still take cash, such as choosing cash on delivery (COD) as a manual payment method within Shopify Payments.
With COD, customers pay cash when they receive their orders in person, often through a courier. While rare in ecommerce, Shopify Payments supports COD and doesn’t charge transaction fees for it.
Advantages of cash payments
The merchant instantly receives payment, and they do not owe any fees for payment processing.
Disadvantages of cash payments
For all its simplicity, cash has lost much of its appeal among customers. Many customers prefer credit cards that give them cash-back rewards, while others like the convenience of mobile payment services embedded into their smartphones and smartwatches.
Keeping cash on-site makes merchants vulnerable to theft. For online retailers, accepting cash is largely impractical, if not impossible.
3. Mobile wallet
Mobile wallet services function via apps that run on smartphones, tablets, and smartwatches, and link to a customer’s credit card, debit card, or bank account.
Payment processors can also integrate some of these options into web-based checkouts, depending on the service. Some mobile wallet examples include Apple Pay, Google Pay, and Samsung Pay.
Once a person sets up their mobile wallet account, they can use these apps to quickly pay for things at vendors that accept mobile payments. Digital wallets store a customer’s payment info securely, so they don’t need to re-enter it every time.
Advantages of mobile wallet payment
Mobile wallets offer great convenience to customers, who can use them at tap-to-pay terminals in brick-and-mortar stores or in an online shopping cart when purchasing items over the internet.
While they don’t yet rival credit or debit cards in scale, their popularity is growing. About one in five people who use digital wallets now leave their physical wallet at home, relying entirely on mobile payments when shopping in person.
Disadvantages of mobile wallet payments
Merchants will need a new point-of-sale terminal to accept tap to pay transactions in a brick-and-mortar store. Many mobile wallet apps also place transaction limits on their customers—limits that tend to be much lower than most credit card limits. This can put an artificial cap on the size of a customer’s purchase.
4. Buy now, pay later (BNPL)
A buy now, pay later plan (BNPL) payment is a loan that the BNPL company offers to a customer so that they can purchase merchandise on credit, but without a credit card.
Popular BNPL lenders include Shop Pay Installments from Shopify, Affirm, Afterpay, Sezzle, PayPal’s Pay Later, and Klarna. BNPL is particularly popular for online shopping, and some brick-and-mortar retailers now accept it in stores.
Advantages of BNPL
A BNPL service extends credit to consumers, including to many of those without good credit or those without credit cards. For consumers, there are typically no upfront fees to use the service. Customers pay back the loan in installments without interest, unless they miss a payment.
This payment option may drive more purchases, especially for higher-priced items. BNPL often encourages customers to spend more than they might with cash, a debit card, or even a traditional credit card.
Disadvantages of BNPL
BNPL services don’t charge high interest rates to customers upfront, but they instead tend to charge higher percentages to retailers. This typically ranges from 2% to 8% of the purchase, which can be far higher than what credit cards charge retailers.
5. Checks
Some customers still pay with paper checks, whether from a personal checking account or with a cashier’s check from a bank. While checks aren’t as fast as online payment methods, they can at least be more practical to send via the mail than cash.
Advantages of check payments
For a customer, checks come with almost no purchase limits. They can draft a check covering any amount of money in their bank account.
Disadvantages of check payments
Financial fraudsters have long favored checks as a way to stiff merchants out of money. Personal checks come with limited fraud protection, so they’re risky for merchants without verification systems.
To avoid the risk of bounced checks, merchants must invest in check processing terminals that rapidly process and verify these transactions.
These check readers typically cost north of $250 and must link to a payment verification network. As such, many small businesses accept bank checks but refuse personal checks. Plus, checks increase processing times. An online retailer might wait to send goods until a check clears, which adds friction to the process.
6. Bank transfer
A bank transfer involves sending money from the account of one person or business to the account of another person or business.
Sometimes bank transfers go through the Automated Clearing House (ACH) network in the US, or directly between banks as wire transfers. These transfers are most common for very large purchases, particularly those involving real estate.
Advantages of bank transfers
Bank transfers are very secure. While they often come with a one-time fee, sometimes for both sender and receiver, they do not involve a percentage-based commission like one would pay in a BNPL or credit card transaction.
Disadvantages of bank transfers
Bank transfers are impractical for most everyday purchases, especially small online purchases, given that it can take a few days for the transaction to clear. And with wire transfers, the one-time fee (often ranging from roughly $15 to $50) can be exorbitant when linked to small purchases. For this reason, bank transfers tend to be limited to very large purchases.
7. Autopay
An autopay system automatically debits a customer’s bank account, credit card, or debit card on a set date, often monthly.
Recurring billing requires customers to have a valid payment method on file, such as a card or bank account.
It’s commonly used for credit card bills, utilities, and charitable donations. But for merchants, the biggest opportunity lies in using autopay to support subscription models and recurring billing.
With autopay in place, customers don’t need to re-enter payment information or approve each charge. Instead, payments happen seamlessly in the background. This creates a frictionless checkout experience for repeat purchases, from streaming services to subscription boxes.
Advantages of autopay
Autopay promotes customer retention, since customers can schedule automatic purchases instead of reauthorizing payments every month. It also prevents missed payments for essentials like phone service and electric bills, while making online subscriptions and memberships easy to maintain.
Disadvantages of autopay
Autopay applies only to certain periodic transactions. It doesn’t work for one-time purchases, and some customers may be cautious about signing up without flexible cancellation options.
8. Cryptocurrency
Cryptocurrency has become an increasingly viable payment option, with services like BitPay and Wirex offering debit cards funded with mainstream coins like Bitcoin. Some ecommerce retailers even let customers pay directly with crypto through platforms like Crypto.com.
Advantages of crypto payments
Many leading digital currencies, including Bitcoin, run via blockchains, which are systems that record financial transactions using decentralized peer-to-peer computer networking.
These blockchains operate independently of government control, which appeals to people who want to use currency that’s outside government-backed financial systems, as well as those who see crypto as more secure. Accepting crypto as payment opens businesses up to these customers.
Disadvantages of crypto payments
Compared to government-backed “fiat” currencies like the US dollar and the euro, cryptocurrency is volatile. This may pose a risk to merchants who accept crypto payments, as the value of the crypto you accept one day might be worth significantly less the next day.
Crypto also lacks the robust payment infrastructure of credit cards, debit cards, and mobile payments, although this is starting to improve.
9. Rewards or points
Some ecommerce stores offer rewards or points systems that let customers redeem accumulated points to cover some or all of a purchase. For example, customers might earn points based on a percentage of each order, and eventually, they can redeem those points to buy an item rather than paying in cash.
Many merchants pair these systems with loyalty programs, where rewards aren’t just about discounts but also about building long-term relationships with repeat buyers, such as offering early access to a new product or VIP events.
Advantages of rewards or points payment
Accepting rewards or points may result in less direct revenue in the short term, but it’s a proven way to drive customer loyalty. Over time, this loyalty can increase sales and lower acquisition costs. For example, you can grow your email list by offering rewards to new subscribers instead of relying solely on paid ads. Loyalty programs can also encourage repeat purchases, higher order values, and stronger brand affinity.
Disadvantages of rewards or points payment
Adding rewards or points systems introduces an extra layer of complexity for retailers. While Shopify integrates with many loyalty program providers that make setup and management easier, it’s still an added component compared to accepting only traditional payments. These programs can also impact short-term revenue if customers choose to pay with points instead of money.
10. QR code payments
QR code payments let customers scan a code with their smartphone to complete a purchase. The code links directly to a secure payment gateway, where customers can confirm the transaction using their preferred payment method, such as a credit card, digital wallet, or bank transfer.
QR codes can be displayed at checkout, in-store, on product packaging, or even in marketing materials, giving merchants a flexible way to accept payments.
Advantages of QR code payments
QR codes provide a fast, contactless checkout option that works both online and offline. They’re especially useful for mobile-first customers, pop-up shops, or events where traditional payment terminals aren’t available. They also allow merchants to connect payments directly to loyalty programs or promotions.
Disadvantages of QR code payments
QR code adoption varies by region, so not all customers will be comfortable using them. They also require a smartphone and internet connection, which can limit accessibility. Merchants need to ensure their QR code payment system is secure and integrates with their existing checkout process.
11. Digital payment links
Digital payment links let merchants generate a secure URL that customers can click to complete a purchase. These links can be shared through email, text, social media, or even chat apps, making them a versatile option for direct-to-customer transactions outside of a traditional online store.
When clicked, the link directs the customer to a checkout page where they can pay using their preferred method.
Advantages of digital payment links
Payment links are simple to create and flexible to use across multiple channels. They’re ideal for social selling, invoices, or custom orders where setting up a full product page isn’t practical. Customers also appreciate the convenience of completing a purchase with just one click.
Disadvantages of digital payment links
Since links are often shared outside of a storefront, merchants need to ensure strong security measures to protect customers from phishing or fraud. They may also offer a less branded experience compared to a full Shopify checkout flow.
Payment methods by region
Payment preferences vary widely across the globe. What feels standard in one market—like credit cards in the US, might be less common elsewhere, where mobile wallets, bank transfers, or cash on delivery dominate.
Understanding these regional differences helps merchants localize checkout, reduce cart abandonment, and build trust with international customers.
United States payment preferences
- Digital wallets lead ecommerce transactions. A 2024 report found that mobile wallets accounted for 37% of US online transaction value, with projections rising to 52% by 2027. Credit cards and debit cards followed at 32% and 19% respectively. Together, these cover 88% of all ecommerce payment value.
- Growing in-store adoption of digital payments. In-store digital wallet usage increased to 28% in 2024, up from 19% in 2019.
- Cards remain dominant overall. In 2024, credit and debit cards together accounted for 35% and 30% of all US consumer payments by number, while cash stayed at 14%.
UK and Europe payment trends
- UK online payments still favor cards. Credit cards account for 62.1% of UK payments, with 93% of all card transactions under 100 pounds being contactless.
- Digital wallets on the rise. Over 29% of card transactions in the UK were from digital wallets in 2023, indicating strong growth in mobile/digital payments.
Asia-Pacific payment methods
Mobile wallets are the fastest-growing payment method across Asia-Pacific. By 2027, they’re expected to account for 66% of all point-of-sale (POS) transactions, up from approximately 50% in 2023.
How to choose the right payment method for your business
- Consider your customers’ location
- Check payment method history
- Analyze your target demographics
- Survey your customers
- Compare payment processing fees
- Consider recurring billing
- Evaluate security and compliance needs
- Plan for international expansion
With all of these payment method options, it can seem overwhelming to choose the right one. But the good news is that you don’t have to limit yourself. Retailers often choose to accept multiple payment methods.
Accepting multiple payment methods can add some operational complexity, but the benefits of meeting customer preferences usually outweigh the costs. Use the following steps to decide what payment methods to offer:
1. Consider your customers’ location
The countries where you sell can influence the payment methods you accept. For example, if you sell in China, your customers likely expect to be able to use payment apps like WeChat Pay and Alipay.
Customer location can also influence your choice of payment processors. You want your payment processor to be recognized and trusted in the country where you sell.
2. Check payment method history
Looking at your payment method history by reviewing orders within Shopify can provide clues as to what payment methods you should offer going forward.
When you first launched your store, you may have accepted every payment method available. That could eventually become too unwieldy to manage, or the fees too costly. If customers are using only a handful of payment methods, consider focusing on those to reduce fees and streamline the checkout page for your customers.
Or, you might find that certain payment methods are infrequently used but drive high-value orders, making them worth keeping.
3. Analyze your target demographics
Different generations approach payments in very different ways. Knowing who your customers are—and how they prefer to pay—can guide which options you prioritize at checkout.
Gen Z (born 1997–2012)
Gen Z is mobile-first and wallet-first. In-store mobile wallet use among Gen Z has grown 23% since 2022, and recent surveys show they’re more likely to use BNPL than credit cards. Adding Shop Pay, Apple Pay, Google Pay, and installment options can help capture these younger shoppers.
Millennials (1981–1996)
Millennials also lean heavily on digital wallets and are frequent users of BNPL online. Millennials (along with Gen Z) are leading digital wallet adoption and expect convenience and speed when shopping online and in-store.
Gen X (1965–1980)
Gen X shoppers still rely on credit and debit cards but are steadily adopting wallets––in-store usage increased by 5.1% between 2022 and 2024. Keep card payment options prominent, but offer wallets and BNPL for higher-ticket purchases to reduce friction.
Boomers (1946–1964)
Sixty-one percent of baby boomers rank security as their top payment priority—the highest among all generations surveyed. They notably favor debit cards (47%) for everyday purchases and credit cards (40%) for higher-value items, while digital wallets remain rarely used for big purchases (just 1% to 2% usage).
Why this matters for merchants
Wallets are gaining across all age groups—global forecasts project they’ll account for nearly half of all sales by 2027. At the same time, BNPL is surging among younger demographics but comes with higher late-payment risks, so communicate terms clearly.
4. Survey your customers
If you’re not sure what payment options your customers prefer, ask them! You can do so with a simple post-purchase survey emailed with their order confirmation. Or you could run a brief survey when attracting new leads, such as including a line on your email signup form asking what their preferred payment method is.
Consider tying surveys into your loyalty programs too. You could offer bonus rewards for customers who complete a brief survey on topics like preferred payment methods, shipping options, and other information you want to know.
Understanding customer preferences is key. Otherwise, you risk cart abandonment or other barriers to purchase when shoppers don’t see their preferred payment method at checkout.
5. Compare payment processing fees
One reason some stores exclude certain payment methods is fees. While customers might prefer some payment options over others, a difference in fees might outweigh this customer satisfaction benefit, depending on factors like your margins.
6. Consider recurring billing
Consider adding recurring billing options, such as autopay for subscriptions. While setup may require some extra steps, recurring billing can lead to benefits like increasing customer retention by removing checkout friction once customers get set up. You can even tie recurring billing into a rewards or discount system.
7. Evaluate security and compliance needs
Payment methods need to be convenient, but they also need to be secure and compliant with local regulations. Customers expect their data to be protected, and any lapse can erode trust instantly.
When choosing payment providers, look for:
- PCI DSS compliance to ensure cardholder data is handled safely
- Fraud prevention tools like encryption, tokenization, and real-time risk analysis
- Regional requirements such as GDPR in Europe or PSD2’s strong customer authentication (SCA.
- Dispute and chargeback support, which can reduce financial risk for your business
Prioritizing security and compliance not only protects your business from violating regulations, but also reassures customers that it’s safe to shop with you.
8. Plan for international expansion
If you’re selling across borders, or planning to, your payment strategy should reflect how customers prefer to pay in each market. Shoppers in Germany often rely on bank transfers, while customers in China expect to see Alipay or WeChat Pay. In Latin America, cash-based vouchers and local debit cards are popular.
Supporting region-specific payment methods not only makes checkout smoother but also shows international customers you understand their needs. It can reduce cart abandonment, increase trust, and help your brand compete with local players.
On Shopify, you can use Shopify Payments and third-party integrations to localize payment options, currency, and language, so your checkout experience feels familiar no matter where your customers are.
Accept a wide range of payment methods with Shopify Payments
If you want to offer your customers a wide variety of payment options easily, you can choose Shopify Payments as a payment processor. That doesn’t mean you have to limit yourself to processing payments through Shopify—you can still add integrations for other payment platforms. Shopify Payments offers a straightforward, affordable, and reliable way to accept payments.
With Shopify Payments, you can accept all major credit cards, along with alternative payment methods like mobile wallets, BNPL, autopay through Shop Pay, and more.
Don’t risk losing customers at the checkout page to an unreliable payment processor or limited payment options. Integrate Shopify Payments into your store for a better checkout experience.
Payment methods FAQ
What is a payment method?
A payment method is a way to pay for goods and services, such as using a credit or debit card, mobile wallet, bank transfer, check, cash, cryptocurrency, etc.
What are payment methods for?
Payment methods give customers options for how to pay for goods and services. Offering multiple payment methods can satisfy customers with different preferences in how they make purchases.
What is the most common method of payment?
The most popular payment methods are credit cards, debit cards, and cash, but it depends on the situation. Some online stores, for example, see that the most common payment method is a mobile wallet like Apple Pay, while some see options like buy now, pay later (BNPL) becoming more popular.
What are the 3 main types of payment options?
The three most common types of payment in today’s market are credit cards, debit cards, and cash. Credit and debit card transactions involve fees paid by merchants to the card companies, but they tend to involve larger purchase amounts than cash transactions.
Which payment method is the best, and why?
The best payment methods are the ones that your customers prefer, as that is what will lead to higher customer satisfaction, retention, and fewer issues like cart abandonment for online stores. Consider factors like your customers’ location and age to see which payment methods are most popular.
