The Most Popular Online Payment Methods Globally and Locally

2Checkout (now Verifone)
8 min readAug 21, 2020

As a merchant looking to enter eCommerce markets on different geographic coordinates, one of the greatest challenges you face is understanding what the most used online payment methods are. Knowing which online payment is best for that market is paramount, as shoppers are 70% more likely to finalize a purchase if their preferred payment method is displayed as an option.

Sure, you may be aware of cards’ and PayPal’s popularity, but is your business really catering to the preferences of all audiences you’re targeting?

Let’s go over the best payment methods online and see if there are any you are omitting.

Global eCommerce payment methods

Whether they’re shopping from a desktop browser or from your mobile app, consumers nowadays expect different payment methods to be featured in online stores, so they can choose the one that suits that specific need. In order to be relevant to the widest audience you need to ensure your site has capabilities to support those payment means which are most popular online.

Bonus: See how easy it is to go global and other benefits of going beyond payments.

So if you’re casting a wide net and are targeting any of the 4.57 billion internet users worldwide, your site list of payment methods should definitely include:

Credit & debit cards

Credit cards remain one of the most popular choices globally for online purchases, although their market share has been dented in recent years by eWallets. Worldwide, cards accounted for 41% of eCommerce transactions in 2018, with a clearer preference in longstanding eCommerce markets, such as Europe and the Americas.

Cards’ popularity as online payment methods was built on the protection features offered — card transactions have been regulated for many years by global or regional compliance standards and also by consumer protections issued by payment processors, such as those upheld by American Express, Mastercard and Visa.

Credit cards have a slightly more marked preference in Western markets vs debit cards, given some of their additional features. For example, some shoppers are incentivized to use credit cards to have access to the bank’s reward programs. In the US, more so, credit card spending impacts the user’s credit scoring and serves as an extra motivation to opt for it as an online payment method.

Card’s claim to the number one spot in consumer preferences for eCommerce payment methods has been seriously challenged in recent years, as we’ll see going forward.

eWallets

Also known as digital wallets, eWallets are one of the fastest growing online payment methods in B2C eCommerce all over the world, projected to account for 50% of global eCommerce sales by 2022. Some reports are even finding that use of eWallets has overpassed that of cards last year on a global level — in some markets, Asia Pacific, for example, this online payment method had a share of almost 60% of transactions in 2019.

This alternative payment method works like a prepaid credit account, and stores the customer’s personal data and funds. When using an eWallet, the user no longer has to input his bank account details to complete the purchase, being redirected from the checkout to the eWallet’s page where they simply have to log in with their username and password to conclude a purchase.

The most popular digital wallets include PayPal (predominantly in the Western world), AliPay (popular in Asia Pacific), ApplePay, GooglePay, WeChat, or Venmo. eWallets also work in combination with mobile wallets, employing a smartphone’s biometric options, which help the customer authenticate faster thus finishing their payments faster.

Bank transfers

This online payment method involves the customer paying from their banking account with their own funds. It is perceived as having an extra layer of security, as transactions require authentication through the customer’s bank. Basically, when chosen as payment method during checkout, a bank transfer redirects the user to their internet banking portal, where they have to log in and authorize the transaction.

Bank transfers accounted for 9% of worldwide eCommerce transaction volumes last year, chosen primarily in Europe.

Buy now, pay later

An online payment method that has gathered attention lately and which has registered a 162% growth in the past two years is Buy Now, Pay Later. This is a form of instant lending which more and more young consumers are turning to, as Teen Vogue also reports. When choosing this option, shoppers have the option to pay later, over time, without having to open up a credit card for this. Availability of this option during checkout has been reported to persuading 30% extra buyers to finalize a purchase they wouldn’t have otherwise.

While this alternative payment method is still in its infancy, with just over 1.5% of global eCommerce transactions in 2019, it is expected it will rise over the next 3 years. Some of the options for this payment method include Klarna, AfterPay, and Bread.

Prepaid cards

Another alternative online payment method are prepaid cards, chosen primarily by unbanked users or minors. Customers opt for a prepaid card from a set of predefined available values and then they use the details on that card for online transactions.

Market penetration of prepaid cards is currently at just around 1% of all global eCommerce transactions, some of the most popular cards chosen by users including Paysafecard or Mint. Usage of this payment method is more marked in the gaming industry, driven most likely by audience demographics.

Electronic checks

Use of e-checks, an online payment method regulated by ACH, involves drawing money from a checking account. The user himself authorizes the payment directly from his internet bank account and processing is similar to that done in the case of regular paper checks, but faster.

Electronic checks are popular among American merchants with large sales volumes and a high average amount and they are perceived as an affordable online payment method. Apparently, e-checks were the first Internet-based payment used by the US Treasury for making large online payments, which can explain their popularity in this category of users.

Local eCommerce payment methods

While understanding the best payment methods for online businesses targeting global markets is essential, in order to enter some local markets, you have to understand how preferences vary in each region. Some markets, for example, have a stronger preference for cards, whereas in others the eWallet is king.

And, beyond the payment methods detailed above, certain markets also employ online methods developed specifically for citizens in that jurisdiction.

Local payment methods can range anywhere between 10% to 50% in adoption in a country, so be sure to consider local flavors when setting up an eShop there.

Europe

Overall, most European consumers opt for cards or eWallets for their online shopping, with some marked preference for different online payment methods in different markets.

In Germany, PayPal is used by 32% of online shoppers, whereas just 16% of French opt for it. SEPA Direct debit is also a popular option among Germans, used for one time and for recurring payments as well.

In the Netherlands, the most popular payment method is iDEAL, with 44% of shoppers choosing it as 2Checkout’s 2019 digital benchmarks report shows. On a market with a high adoption rate for internet banking, it comes natural that shoppers prefer iDEAL, a standardized online banking-based payment method.

By contrast, in Russia, where banking penetration is lower, we see a higher adoption rate for eWallets. Qiwi wallet, Yandex, and WebMoney are popular payment methods here.

In France, a market with a high banking penetration rate, shoppers may opt for their cards, but as a merchant you still have to know their preferences. 2Checkout’s benchmark study found that 14% of shoppers here favor their Cart Bancaire, a local payment method available only in this market.

Over in Turkey, 17% of shoppers also prefer local cards, however, they do so because these local cards come with installment features. 80% of card transaction here are recorded through installment cards such as Maximum or Bonus Card.

North America and Latin America

Credit cards and debit cards remain the most popular online payment methods in the Americas, with more than 50% of market share in each region, but, beyond cards, preferences diverge.

Where North Americans are more likely to opt for their PayPal or other preferred digital wallet, South Americans are more likely to use a local credit cards with installments. In Brazil, for example, local credit cards with installments are a top choice for almost a third of online shoppers. If you’re selling on the Brazilian market and you’ve not yet enabled payments for Boleto Bancario, you might as well close up shop now. 12% of Brazilian shoppers pay with their Boleto Bancario and 28% others prefer local cards with installments. Only 20% of cards used here support international currencies so, unless your payment provider accepts these payments, you’ll need a local partnership with a domestic processor to be relevant in Brazil.

Asia Pacific

Asia-Pacific leads global preferences for mobile/ digital wallets, with more than 50% of this region’s online transactions being wallet based.

Chinese consumers are the biggest fans of this online payment method, on a market dominated by AliPay and WeChat Pay. 42%, almost half of all online transactions in China are paid via AliPay. Cards come second in preference in Asia Pacific, followed by bank transfers.

In terms of local preferences, about 5% of Japanese opt for Konbini, a local cash-based payment method in that country, which allows shoppers to order online and then pay in a convenience store. Given Japanese people’s propensity to visit convenience stores often, ATM payments at these stores became quite popular for shoppers here. JCB card payments are also a shopper favorite in Japan, given the card’s wide usage — 55 million JCB cards were being used in Japan three years ago.

Africa

Given that the majority of African American online shoppers don’t have access to traditional banking services, mobile payments as an alternative online payment method are on the rise in these markets.

Consumers who buy online in Africa have a propensity to pay with mobile wallets, though in countries such as Egypt cash on delivery is preferred, and others still opt for prepaid cards.

If you’ve made it this far, you now have a much stronger grip on what are the most popular payment methods online and you have a good start on how to approach each market. Getting to know the different online payment methods will allow you to adapt locally, which in time will lead to better conversion rates on your site. Keep cultural preferences in mind while tailoring local strategies and choose those digital tools that will ease your entry into new eCommerce markets.

For a comprehensive understanding on how 2Checkout can help with entering new markets, read our How to Localize Your Digital Business for Global Commerce guide.

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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.