Accepting Multiple Payment Methods: A Practical Guide for Businesses

As a merchant, your cash flow can quickly take a hit if you are only accepting a handful of payment methods. Today’s shoppers use buy now, pay later (BNPL), digital wallets, cash, cryptocurrency, and cards to pay for their transactions. If you don’t have the capacity to accept multiple payment methods, it’s going to quickly have an impact on your bottom line. 

An average of 70.22% of mobile shoppers abandon their carts. Out of this figure, 10% say it was directly because their payment method wasn’t accepted. Another 8% abandon carts because their card was declined. Giving customers the payment options they want increases the likelihood that they’ll make a purchase, and it offers them an alternative method if their preferred payment method encounters a problem.

To learn more about how to accept multiple payment methods at your business, read on.

TL;DR

• Customers expect to use their preferred payment method when they process a payment. If they don’t have access to it, they may abandon checkout.
• Credit and debit card payments remain an essential option for online and offline sales.
• BNPL is increasingly popular among a younger, mobile-first demographic. It is also effective for high-ticket items and increasing your average order value.
• ACH and bank transfers work well for recurring payments, large purchases, and B2B sales.
• If you offer primarily in-person sales, you should prioritize card payments and tap-to-pay wallets.
• For online sales, consider incorporating cards, wallets, and BNPL options. 
• Every method contains a different level of chargeback risk, fees, and settlement timelines. It’s essential to understand how offering multiple payment options can impact your operational complexity, payment-related costs, and reconciliation processes. 

With a tailored payment setup, you can handle a variety of payment methods as your company grows.

Why Is It Important To Accept Multiple Payment Methods? 

The first true revolving credit card didn’t exist until 1958. While installment payment plans have existed for much longer, Klarna, Affirm, and other BNPL providers only came into existence in the last two decades. 

Although BNPL, digital wallets, and popular payment options are relatively new additions to the payment playing field, they have rapidly gained in popularity. Because of this, it’s a good idea for companies to offer multiple payment options in order to appeal to the customers who prefer using them. 

By offering multiple payment methods, merchants can take advantage of a few key benefits.

Increased Conversion Rates

When you make transactions easier, it boosts your conversion rates. Customers don’t have to search around for a credit card when they have a digital wallet that they can click on or a BNPL option they can use. BNPL and digital wallets are also ideal for reducing checkout steps, which reduces hesitation and second-guessing.

Fewer Abandoned Checkouts 

For similar reasons, providing multiple payment options means fewer abandoned checkouts. When a card is declined, customers can easily use an alternative. Plus, they don’t have to abandon carts due to not having their preferred payment network available.

Meeting Customer Preferences

Having different payment methods is an essential way to enhance your overall customer experience. When customers can check out quickly with their preferred method, it helps to boost trust and overall customer satisfaction. In turn, this increases the likelihood of repeat customers.

More Market Access

Whether you are moving into a new geographic region or simply want to attract a different demographic, providing multiple payment options can help. Different regions and groups have different payment preferences. While some areas prefer bank transfers, others rely on cards. If you want to sell internationally, you need to be aware of the payment preferences and customs of your target demographic.

Reduced Payment Risk

If you only rely on card payments, it puts your entire revenue stream at risk if there is an outage or network issue. By deciding to accept multiple payment methods, you can diversify your payment mix and still have cash flow if there is a problem with a single method.

Which Payment Method Makes the Most Sense for Your Needs?

At PayCompass, we can help you determine the payment processing setup and payment methods your company needs. To narrow down your ideal list of payment options, you should consider whether you sell online and offline, the type of buyer you have, your customer preferences, and local methods for your international buyers.

Online or Offline

First, you need to consider whether you sell online or offline. Online sellers absolutely have to have cards. If you have online subscriptions or invoices, you may also want to offer ACH or bank payments. To boost mobile conversion rates and satisfy a younger demographic, digital wallets are essential. For online discretionary products or high order values, BNPL is a good payment method to offer.

If you primarily sell in person, you’ll still need to offer debit and credit cards. Tap-to-pay is now an expectation for in-person transactions, making digital wallets an important inclusion. However, BNPL, ACH, and bank transfers are rarely needed for in-person transactions.

Who the Buyer Is 

Next, you should look at whether you are primarily providing business-to-consumer (B2C) or business-to-business (B2B) transactions. For B2C businesses, cards are a priority, and digital wallets are increasing in popularity. BNPL and ACH are optional. However, offering BNPL can help boost your average order value and conversion rates.

For B2B companies, ACH and bank transfers are the most cost-effective options and are widely used by finance teams. However, card payments are also important if you have smaller invoice values or want a convenient option for new clients. In most cases, B2B companies don’t have to worry about digital wallets or BNPL.

What the Customer Needs

As you review your payment orchestration and options, you should also look at what your customers expect from their checkout experience. 

• Speed: For customers who care about speed and convenience, cards and digital wallets are the fastest option.
• Low Fees and High-Value Transactions: When you need low fees or are dealing with large transactions, ACH and bank transfers are your best bet.
• Trust and Familiarity: It is a good idea to offer local payment methods your customers are familiar with to reduce your rate of abandoned checkouts. Depending on where you are located, this may include Pix, Boleto, or similar options.
• Flexibility: If your customers need payment flexibility, BNPL allows them to pay off their purchase over time.

How To Incorporate More Payment Options Into Your Operations

While adopting more payment options can increase your conversion rate and improve customer satisfaction, it also creates an added layer of complexity for your payment processes. If you want to offer multiple payment methods, remember to consider how your options affect back-office workflows, pricing tradeoffs, chargeback risks, and refunds.

Pricing Tradeoffs

First, you need to consider the pricing trade-offs that come with different payment methods. For example, ACH and bank transfers tend to have the lowest fees, but they settle slowly and may be inconvenient for customers. Meanwhile, credit cards have higher processing fees, but they are faster and more broadly accepted.

With BNPL and local payment methods, you get a similar cost-and-benefits trade-off. BNPL involves more fees for you and the buyer, but it can boost your conversion rates and average order value. Similarly, local payment methods are more complex to integrate, but they can make it easier to sell internationally.

Fraud and Chargebacks

Your risk of fraud and chargebacks also varies by the payment type. 

• Debit and Credit Cards: At the top end of the scale, debit and credit cards have the highest chargeback risk. 
• Bank Transfers and ACH: ACH payments and bank transfers have fairly low fraud rates, but there are still reversals in some cases. 
• BNPL: With BNPL, the provider frequently assumes some of the fraud risk, but this can vary.
• Digital Wallets: Meanwhile, digital wallets use tokenization and advanced authentication measures, so they have one of the lowest rates of fraud. 

Refunds

Each time you add a new payment method, you have to understand an entirely new refund process. In most cases, digital wallets and card payments have the fastest and most familiar refunds. While ACH and bank transfer refunds can take more time and communication, they still occur relatively quickly. BNPL involves the most coordination, especially if some of the installment payments have already started.

Reconciliation Complexity

Finally, you should consider the impact of offering multiple payment options on your back-office operations. When you have many payment methods involved, you have to track different settlement timelines and fees. Disputes and refunds are also handled differently based on the payment method. For local payment methods, you may need to deal with different reporting styles and currency conversions.

A Side-by-Side Look at Common Payment Methods

To get a better understanding of what it’s like to accept multiple payment methods, we’ve gathered together a side-by-side comparison of the most common payment styles and what they are used for.

Payment Method	Examples	When Is It Used?	Major Benefits	Key Concerns
Credit and Debit Cards	Mastercard, Visa, American Express	Cards are typically used for everyday purchases online or offline.	They are accepted just about everywhere. Payments are authorized quickly.	This payment type often has higher processing fees. Chargebacks can also add up.
Digital Wallets	Apple Pay, PayPal, Google Pay	This payment type works well for mobile purchases, and it is popular among younger shoppers.	Digital wallets offer one-tap checkout, high conversion rates, and an added level of security.	Because not all customers have digital wallets, it can’t be a merchant’s sole payment method.
ACH and Bank Transfers	ACH, wire transfers, SEPA	These are often used for high-value transactions, recurring bills, and B2B payments.	They are popular for charging minimal fees and low chargeback rates.	Settlement can be slow, and they aren’t convenient for impulse buys.
Buy Now, Pay Later (BNPL)	Klarna, Affirm, Afterpay	This can increase conversion rates among customers who are short on cash. BNPL is a popular payment method for high-value purchases.	BNPL can boost average order value.	The fees are often higher for BNPL.
Local Payment Methods	Boleto, UPI, iDEAL	These payment methods are ideal for the local regions where they are used the most.	Offering local payment methods is convenient for customers and helps to improve trust as merchants move into new market areas.	This method increases the complexity of your payment operations.
Cryptocurrency	Bitcoin, Ethereum, USDC	Often used for cross-border payments, digital goods, or customers who prefer crypto checkout.	It can expand global reach and reduce chargeback exposure (especially when using stablecoins).	Adoption is still limited, and volatility, refunds, and compliance/accounting requirements can add operational complexity.

How PayCompass Helps Merchants Accept Multiple Payment Methods

At PayCompass, we are more than just a payment provider. We help merchants evaluate their existing payment gateway, processor, and payment acceptance, so they can maximize their system performance. Then, we work with you to set up a payment stack that grows with your company. 

Depending on your situation, this payment stack may involve a tailored setup, scalable infrastructure, or similar options. We’ll consider what type of support you need for card payments, BNPL, digital wallets, ACH, bank transfers, and local payment methods. Once we know what kind of payment setup you require, we can work quickly to engineer payment operations that optimize your acceptance and performance goals.

Final Thoughts

As a merchant, deciding to accept multiple payment methods is essential for your cash flow and revenue. Customers prefer methods that they are familiar with. When you don’t have the right payment methods, it can lead to higher cart abandonment rates and a poor customer experience.

While there are many advantages to providing multiple payment methods, there are obstacles that you must overcome as well. Reconciliation, refund policies, and fees become more complex when you’re dealing with different payment types. Additionally, having multiple methods can affect your chargeback and fraud risk.

For all of these reasons, it’s important to get expert help with setting up your payment gateway, processor, and payment options. By turning to PayCompass for professional support, you can gain a competitive advantage and reduce the complexity involved in making major payment upgrades at your business. 

Learn more by reaching out to our team of payment processing experts today.