5 Online Payment Solutions Small Businesses Should Explore in 2024

The Evolution of Online Payments: Streamlining the Checkout Experience

In the past, customers had to manually input their bank or credit card details on online checkout pages, often leading to frustration and longer transaction times. Today, a diverse array of online payment options, including card payments and direct bank transfers, enhance the customer experience by minimizing obstacles and expediting transactions.

As convenience plays an increasingly vital role in driving online sales, small businesses must consider a wider range of payment solutions to remain competitive. Here are some payment methods to consider integrating into your website:

1. Mobile Wallet Payments
   Mobile wallets are digital payment applications developed by independent FinTech experts that securely store card and banking information for purchases across various websites. Users can install a mobile wallet app on their smartphone or use pre-installed options like Apple Pay. To complete a purchase, customers simply select their mobile wallet at checkout, log in (often using facial recognition), and confirm the transaction. Mobile wallet payments enhance security by eliminating the need to enter payment details manually.

   • Features: Transaction fees can be high; Very popular; Excellent convenience.
   • Popular Mobile Wallets: PayPal, Apple Pay, Google Pay, Samsung Pay.

2. Banking App Payments
   Banking app payments function similarly to mobile wallets but are specific to the customer’s bank. Users can store their payment information and make purchases across different websites without re-entering their data. During checkout, customers select their banking app, enter their linked email or mobile number, and confirm their transaction with a code.

   • Features: Transaction fees can be high; Growing popularity; Excellent convenience.
   • Examples of Banking Apps: Chase Mobile, Capital One Mobile, Bank of America Mobile, U.S. Bank Mobile Banking.

3. Biometric Payments
   Biometric payments utilize unique physical traits like fingerprints, iris scans, facial recognition, or voice commands for transaction authorization, moving away from traditional PINs and passwords. In online shopping, fingerprints or facial recognition are common methods of verification linked to digital wallets, and voice confirmation is available for applications like Alexa.

   • Features: Transaction fees can be expensive; Growing popularity; Excellent convenience.
   • Popular Apps with Biometric Payments: Amazon (Alexa), Apple Pay, Google Pay, PayPal.

4. Buy Now, Pay Later (BNPL)
   BNPL services allow customers to pay for their online purchases in installments while merchants receive the total amount upfront. Customers can select the BNPL option during checkout after entering their payment information. This popular method supports budget management for consumers without negatively impacting merchants.

   • Features: Transaction fees may be high; Very popular; Excellent convenience.
   • Leading BNPL Providers: AfterPay by Square, PayPal Pay Later, Shop Pay Installments by Shopify, Klarna.

5. Cryptocurrency Payments
   Despite regulatory challenges, the interest in cryptocurrency as a payment option is on the rise. Major companies like Microsoft, Amazon, and AT&T have already embraced cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). To accept crypto payments, businesses can use a crypto payment gateway that enables customers to pay with digital currencies through their own wallets.

   • Features: Transaction fees may vary; Growing popularity; Good convenience.
   • Notable Crypto Payment Gateways: PayPal, Coinbase Commerce, BitPay, Coinspaid.

Setting Up Online Payment Methods
Integrating online payment options can be done quickly with the right payment processor. Here’s a general overview of how to add payment methods to your online checkout process. Note that some methods, like cryptocurrency, banking apps, and BNPL, may require additional steps.

On Your Website

• Connect a payment processor.
• Go to your website’s checkout settings.
• Select preferred payment methods.
• Save the changes.

Modern website builders often include built-in payment processing or one-click integrations, allowing for easy toggling of options like Apple Pay.

On Digital Invoices

• Log into your merchant account or invoicing software.
• Create an invoice or invoice template.
• Add preferred payment methods when prompted.

On Payment Links

• Log into your merchant account, navigate to the virtual terminal, or select “collect a payment.”
• Choose between a checkout button or a shareable payment link.
• Fill in the required information and select your preferred payment methods when prompted.

Choosing the Right Payment Methods for Your Business
Small businesses should adopt a mix of payment methods, ensuring a combination that prioritizes customer convenience while considering transaction costs. Analyze current customer payment preferences to offer the most sought-after options.

For instance, younger shoppers may lean towards BNPL to manage expenses, while others might prefer established methods like PayPal. B2B clients may choose banking apps to facilitate direct payments from their accounts.