An explanation of several payment options

A thorough guide that details the various payment alternatives is provided to help you comprehend and choose the best payment options for your company.

More firms are expanding their international sales as online tools make it simpler to interact with clients around the world. In fact, according to Stripe research, 70% of online stores already provide international sales. Online firms now face a new obstacle, even if it is simpler than ever to reach a worldwide audience: How do you handle a worldwide audience’s varied client preferences during the checkout process? Depending on where they are located, customers’ preferred methods of online payment vary greatly. Without developing a relevant, recognizable payment experience, you run the risk of excluding whole nations from your addressable market.

Despite the increasingly complicated and fragmented global payments market, Stripe makes it simple for any type of business anywhere in the world to find and accept popular payment options with just one integration.

This tutorial gives an in-depth examination of the payment options that Stripe supports and assists you in evaluating and identifying those that are most suited to your business model and consumer preferences.

1. Advantages of various payment options

Payment methods have changed over the past ten years to accommodate various consumer and commercial needs. There has been a noticeable movement toward wallets like Apple Pay and Google Pay, which offer more security and simplicity, in markets with high card penetration, like the US and the UK. Even local card networks in some regions, like France and Japan, can help companies access more card users. Bank-based methods are significantly desired and trusted for online transactions in countries like Malaysia and Germany, where the use of credit cards is substantially lower. Users can authorize a payment using their online banking credentials through the banking networks in these markets, which often provide a quicker and more secure checkout experience. Meanwhile, in countries with a sizable number of unbanked individuals, Customers can use popular payment methods, such as vouchers, to pay for online goods with cash in countries like Mexico and Indonesia.

Accepting payment options that are popular with your clients and appropriate for your business model enables you to:

Globalize your consumer base: To fully realize the market potential, it may be vital for you to accept local payment options as you enter new areas. For instance, 20% of online transactions in China utilize the regional card network China UnionPay, and 54% use wallets like Alipay or WeChat Pay. You run the risk of missing out on the significant and expanding purchasing power of Chinese consumers if you don’t enable these payment options.

Increase conversion: If their preferred payment option isn’t available, up to 16% of shoppers will abandon their cart. Customers’ likelihood of successfully completing a transaction can be significantly increased by offering them the correct combination of payment choices.

Reduce fraud and disputes: By selecting payment methods that suit your risk preferences, you may anticipate and control the risks involved with accepting online payments. In general, the chance of fraudulent and contested payments is lower the better the level of consumer authentication.

Reduce transaction costs: Cost structures for various payment methods can be optimized. Some payment options may or may not be applicable to your business model and the location of your clients.

2. Deciding on the best payment options for your company

Providing your consumers with relevant payment options is essential whether you’re trying to grow internationally or increase conversion in your native market. But some payment methods may or may not be applicable depending on the nature of your transactions and where your clients are situated.

The seven main payment method families are covered in this part, along with any unique considerations based on your company model, such as those for professional services, on-demand services, SaaS and subscription businesses, and e-commerce and marketplaces. If your B2B platform allows users to receive payments, the appropriate payment options will depend on the users’ business models.

2.1. For marketplaces and e-commerce

Recommended: Bank rerouting, cards, wallets, and “purchase now, pay later”

Even though frictionless checkout processes are essential for all business models, their significance for e-commerce and marketplaces is increased. Customers anticipate simple payment processes that deliver what they need at the right time. The best combination of payment options not only maximizes conversion rates through payment flexibility and convenience, but also lowers fraud and speeds up transactions.

The most popular form of payment is cards, so it’s crucial that you support all key card brands in order to maximize conversion and cut costs. By letting users use previously stored payment information, wallets and bank redirection can also aid enhance conversion (the added verification also lowers the possibility of disputes). Like cards, wallets are a reusable payment option. Customers only need to enter their payment information once, and if it is saved, they won’t need to do it again. You can now provide one-click checkout experiences thanks to this. If you offer “buy now, pay later” payment alternatives, which let your consumers set their own payment terms and split large purchases into smaller ones, you should do so if you sell expensive goods.

Customers prefer to pay using cash-based vouchers and bank credit transfers, which don’t offer quick payment confirmation or native returns, in several sizable markets with limited card usage, such as Brazil, Mexico, and Indonesia. For e-commerce enterprises that normally rely on real-time payment alerts to manage their shipping operations or refunds to foster client loyalty, this can provide difficulties. By providing automatic refund processes and quicker alerts for payment methods that don’t generally offer these capabilities, Stripe can assist international businesses in serving these clients.

2.2 For on-demand services

Recommended: Wallets and cards

On-demand services must promote conversion—often on mobile—while minimising fraud risk because immediate fulfilment is at the core of the consumer experience. Focus on payment options like cards and wallets that provide instant confirmation that the transaction was accomplished. The checkout process can be sped up by using these payment methods, which also let you save client payment information and enable one-tap confirmations. Although wallet transactions normally cost the same as card transactions, they are more secure because verification is necessary to complete payment, which reduces fraud and dispute rates.

Even yet, it’s crucial to consider the local context because customers may trust and want to use payment methods with higher friction to pay for on-demand services or to top off their app balances.

2.3 For SaaS and subscription-based enterprises

Recommended: Wallets, cards, and bank debits

It’s crucial to think about whether payment information can be saved on file and utilized if you manage recurring revenue and want to improve your checkout process for repeat business. You can start payments on a specified schedule without your clients’ involvement thanks to the option to reuse their payment credentials. Customers only need to submit their card number or bank account information once for debit payments made with cards, wallets, or bank accounts. Additionally, Stripe enables customers that choose bank redirection like iDEAL, SOFORT, or Bancontact to use them for recurring payments by turning them into direct debits.

Additionally, a lot of SaaS and subscription businesses struggle with involuntary churn, which occurs when consumers try to pay for a product but are unsuccessful due to expired cards, insufficient cash, or out-of-date card information. 9% of subscription invoices fail the first time they are tried to be charged because of involuntary churn. In addition to supporting several of the most important payment methods for enhancing recurring payment conversion, Stripe Billing can assist with managing recurrent declines for cards (accepting bank debits, for instance, can increase retention because bank account information is persistent).

Accepting reusable payment methods is advantageous to the company, but it’s also critical to consider regional expectations for recurring billing. For instance, sending recurring invoices or reminders to consumers to initiate each payment is typical in markets like Brazil and Indonesia.

2.4. To obtain expert services

Recommended: Cards, debit and credit transfers from banks

If you sell wholesale goods or professional services, even a single payment problem or disagreement could result in a considerable loss of income. When you invoice your clients, you give them more freedom to start paying when funds are available, which helps you safeguard your business and partially solve the problem of being able to securely and successfully accept large payments. In the past, this frequently entailed requesting checks from clients. To reduce payment failure and automate payment tracking and reconciliation, you can also send a hosted invoice with built-in support for credit cards and bank methods.

Furthermore, bank credit transfers are a trusted, irrefutable method of payment that are frequently chosen for really large amounts. Money received via a credit transfer is immediately placed into your account when the transaction has been approved. Credit transfers also give an additional degree of verification and security because they need your clients to start the payment. Additionally, since contracts are normally in existence prior to payment, it is more crucial that payments are successful and cannot be challenged than it is that your company starts the payment. While tracking and reconciling credit transfers can be challenging, Stripe generates virtual bank account numbers to protect your business’s financial information and instantly match incoming payments with unpaid invoices.

  • Fact sheets about payment methods

Review the profiles of the Stripe-supported payment alternatives below to find the appropriate payment ways to integrate based on the location of your customers and your business model.

Credit transfers via ACH

Customers can move money from their bank account to a bank account with a US domicile via credit transfers over the Automated Clearing House (ACH) network. One of the biggest, safest, and most dependable payment systems, the ACH network processed 24.7 billion electronic payments in 2019.

You must give your customers a routing and account number so they can start the ACH credit transfer payment process from their bank accounts. Although certain financial institutions handle same-day ACH credit transfers, which speeds up the transfer of payments, funds can still take a few days to arrive.

A/C debits

You can withdraw money from the US bank accounts of your clients using direct debit payments made through the Automated Clearing House (ACH) network, sometimes known as ACH debits. In 2019, the ACH network handled over 14 billion debit transactions.

Customers must give you their bank account information and authorization to debit their accounts. For ACH debit payments, confirmation may take up to five business days.

After the initial payment has been made, ACH debits may fail or may be challenged by customers. By confirming account ownership by login credentials or micro-deposits, these risks can be reduced.


In the US, affirm has a network of more than six million consumers. Split Pay and Instalments are the two payment options available to customers. Businesses using Affirm get paid in full up front and are shielded from fraud and risky customer payments.

Customers can make an online purchase using Affirm Split Pay and split the cost across four interest-free payments.

Customers can get credit from Affirm Instalments for up to 36 months. They submit a single application in order to be approved for financing. Customers can use the mobile app or the internet to submit their monthly payments to Affirm after approval.

Google Pay

Customers who use Apple Pay can make purchases using credit card information that is saved on their Apple Watch, iPhone, or iPad.

Customers choose Apple Pay as their payment option and approve the transaction using Face ID, Touch ID, or a passcode to pay online. Compared to other payment systems, this two-factor authentication increases the security of transactions and frequently leads to fewer disputes.

Customers may additionally save their phone number, email, and billing and shipping addresses in addition to their payment information.

Work 365 is usage based billing software for Microsoft partners and software vendors to streamline recurring revenue.

Written by Brian Moose

I work at Work 365 - billing and provisioning software for Microsoft Partners and SaaS companies.

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