Advantages and Challenges of Accepting Online Payments

2Checkout (now Verifone)
7 min readApr 19, 2021


The main principle behind business is that one party provides a service or goods in exchange for getting paid by the other party, so the whole profit part of this process demands the ability to accept payments.

As the popularity of eCommerce has risen greatly in recent years, reaching 46% user penetration rate for digital commerce in 2020, the advantages of digital payments have never been so appealing to merchants. Being able to accept online payments has become a prerequisite for companies large and small and, with it, the importance of electronic payment systems has become that much more relevant.

A payment gateway allows a merchant to go beyond geographical limitations in terms of audience and to boost revenue from the extra capabilities brought by these systems.

The advantages of online payment processing are numerous — let’s go over the benefits enjoyed by businesses who accept online payments.

Advantages of Online Payments

Reaching global audiences

Possibly the biggest appeal to accepting online payments is that a business can open up shop to the whole world. As a merchant selling online, your offering is available to much more than just your own nationals — about 56% of online shoppers favor shopping cross-border and therefore one of the main advantages of digital payments is being able to expand your sales reach to these global, eager audiences.

  • Merchant benefit: sales increases
Accepting online payments advantage — Global audience

Reduced costs for transactions

In comparison to classic payment setups, where the shopper has to visit a store and pay there or mail a check, online payments take place in a much more automated environment. This translates into their reduced costs.

Instead of having to employ a cashier or deal with the costs of processing payment slips, merchants are able to set up payment systems, often at no upfront cost, and subsequently pay low transaction fees whenever a sale is recorded on their site.

  • Merchant benefit: cost affordability

Payment security

Accepting online payments comes with lower financial risks for the merchant, by comparison to traditional methods, where the seller may have to verify the integrity of the cash payment or deal with the fees associated with a bounced check.

Accepting Online Payments Benefit — Payment security

Given the speed with which transactions conclude online, one of the advantages of online payment processing is that the shopper’s money is instantly placed in the acquiring account. It can take as little as two or three days for online payments to be cleared, which gives merchants better control over their finances. What’s more, online payments tend to be more tightly regulated, offering extra peace of mind to those selling online.

  • Merchant benefit: operational performance

Optimized customer journey

Online payments allow shoppers to make purchases in whatever global market they want and at whatever time of day they prefer. Convenience in concluding a transaction is the primary reason why users shop online and, as a merchant, you have to cater to this preference.

Without the online payment alternative, prospects would no longer be able to get the gratification that comes with paying online — today’s global shoppers are already accustomed to receiving an instant confirmation for their purchase and, in the case of digital goods, even receiving the goods or access to them directly.

  • Merchant benefit: sales increase, enhanced UX

Payment method acceptance

In traditional brick-and-mortar stores, payment is available usually via cash (in the country’s currency) or card, but in an online setup the possibilities of payment are almost endless. Depending on the type of payment partner you decide to work with, your consumers will have access to numerous payment alternatives.

Accepting online payments advantage — Payment Methods

Top-range payment providers include options for payments for eWallets, cryptocurrency, prepaid cards and so many more. What’s more, some payment providers even facilitate entry in new markets through the acceptance of local payment methods. In Turkey or Brazil, for example, users are accustomed to paying online with their local installment cards, so being able to accept payment through these means will positively impact you bottom line.

  • Merchant benefit: sales increases

More marketing/distribution channels available

No list of the advantages of online payment processing would be complete without mentioning the benefits it can bring to your distribution channels. If you are able to accept payments online you can branch out your sales in the affiliate domain and have other websites and online opinion leaders showcase your products and services with full online payment options available.

Merchants who sell online through affiliates can generate up to 28% of their online sales through these channels, which is a considerable uplift in revenue. Explore options to join an extensive affiliate network and uncover this potential for yourself.

  • Merchant benefit: sales increases

More appealing to impulse buyers

While we’re on the subject of sales increases, consider all of the impulse shoppers your store becomes appealing to when offering online payment features. Depending on the product category you’re selling in, some products and goods manage to convince users on the spot. It would be a shame to not facilitate the payment directly, so there’s another payment gateway advantage to add to our list.

  • Merchant benefit: sales increases

Recurring payments capabilities

In subscription or SaaS businesses, the task of accepting a payment from a client comes at specific intervals, therefore it is a recurring need. And while subscription payment was possible via cash or cheques in the past, nowadays few buyers would consider these payment options, especially when ordering digital goods.

Accepting online payments — Recurring payments

An important payment gateway advantage is thus the automation potential it brings in subscription markets. Merchants can enable recurring billing features through these partners, which in turn translate into fewer required actions to make or accept a payment, both for the shopper and for the seller. Some suppliers also include rich subscription management features, which can be a real help for businesses aiming for customer retention.

  • Merchant benefit: sales increases

Challenges of Online Payments

There are no outstanding disadvantages when it comes to online transactions, but there are several challenges that you will need to take into consideration before starting your online shop.

Technical problems

Like any system that depends on technical infrastructure, online payments themselves may be subject to disturbances and downtime. Tech maintenance operations performed on online payment gateways or in the card network system are usually limited in time, announced in advance, and scheduled for periods when eShops don’t have a lot of traffic, often during the night.

It is good practice to check a future supplier’s SLA (Standard Level Agreement) before signing a new contract, to know in advance how much uptime is guaranteed for the merchant.

Challenge — Technical issues

Unforeseen technical issues can also generate several hours of downtime, which may cause some frustration among shoppers who aren’t able to pay directly. These can, however, be moderated through the right communication and support approaches directly on your site.

  • Merchant risk: stalled business

The cost of fraud

As appetite for online spending has increased, so have fraud attempts in the field. In 2018, some $24 billion were lost globally to fraudulent credit card transactions. A big disadvantage of online transactions is therefore the merchants’ and customers’ exposure to different malevolent attacks. From ID theft, to database exploits and phishing attacks, criminals are becoming more and more versatile in the way they attempt to interfere with online transactions.

Challenge — Fraud prevention

Luckily, as hackers have diversified their arsenal so have payment solution providers. Card purchases, for example, are tightly regulated by security protocols and directives, which include top-of-the-line identity verification services such a biometrics or secure 3D protocols.

All-in-one payment providers also include additional security features in the face of fraud, such as secure web protocols, Address Verification Systems or order monitoring options. The risk of fraud, even when it takes the form of friendly fraud, such as chargebacks, is greatly mediated by payment providers who offer comprehensive fraud mitigation options.

  • Merchant risk: increased costs


We hope our rundown of the advantages and disadvantages of online payments has clearly evidenced that the benefits of accepting online payments greatly outweigh the downsides.

Finding the right online payment provider can guarantee access to extra business capabilities and more operational efficiency, whether we’re talking about small micro companies or enterprises.

Online payments are expected to become the norm in the coming years, and recent distancing times have only accelerated this development. Ensure your business stays modern by including options to accept online payments, and you’ll reap the added benefits that come with this choice.

Learn how to go beyond payments to maintain a sustainable business and improve conversion rates by checking out this dedicated whitepaper.

Go Beyond Payments Whitepaper



2Checkout (now Verifone)

2Checkout (now Verifone) is the leading all-in-one monetization platform for global businesses built to help clients drive sales growth across channels.