Do Alternative Payment Methods Work for E-Commerce?

A key factor for success in e-commerce is make sure customers have an easy and convenient buying experience. This is particularly true when it comes to payment. There is no worse feeling than seeing a potential consumer abandon an almost complete purchase because the payment system is bad or perceived as unreliable

A number of things can contribute to this, from security systems that are poor or, on the opposite end, too aggressive, to a complicated shopping cart process. However, more and more problems have been caused by alternative payment means, especially those that customers can use from their mobile devices.

In a new retail environment that favors personalized choices and innovative methods, merchants who work only with the large credit card companies may be at a disadvantage.
Nevertheless, accepting more payment mechanisms means not only added costs, but new risks as well. Businesses must ask themselves if accepting alternative payment means is worth the bother.

Alternative Payment Means


One of the better known and most widely accepted payment mechanisms is PayPal, currently the Gold standard. This is a convenient and secure means to transfer funds and many merchants and consumers trust it.

• Advantages: Merchants can offer consumers the flexibility of paying with a credit card, a linked bank account or PayPal. It is easy to install and finalization can be customized to fit your brand and business.
• Disadvantages There is a growing PayPal fraud industry, where customers make an order then contest the charge, almost always leading to a charge-back or claims against the merchant.

Android Pay and Apple Pay

Especially for online sales using mobile devices, merchants should consider Android Pay (formerly Google Wallet). Customers still use their credit or debit card for the purchase, but Android Pay gathers the billing and shipping data directly from the user's Google account.

• Advantages: A quick and easy finalization process should never take more than two clicks. For merchants there is minimal installation, as the entire processes uses an existing payment infrastructure.
• Disadvantages Available only to Android and iPhone users, or those using Chrome or Safari search engines, which could limit its reach. Visa Checkout and MasterPass

Visa and MasterCard are also in the alternative payments business.

Both options offer a quick payment means that automatically inputs the customer's billing and shipping data, making the finalization process as simple as possible.

• Advantages - The reliability of the Visa and MasterCard names is a key advantage. Configuration is easy and direct. Almost any online customer is already using at least one of these cards. Merchants may also offer special deals for customers using one of these payment means.
• Disadvantages - Customers must first install and activate their virtual wallet using Visa Checkout or MasterPass. This is an added step and another pin customers must memorize, which may lead to confusion or irritation.


The jury is still out on the feasibility of Bitcoin and its publicity as a legitimate alternative payment means. Meanwhile, the most important question merchants might ask is how likely it is that their customers will be part of the Bitcoin world.

• Advantages: Quick payments and relatively low processing fees. Payments are fully reversible, so there is no risk of payment or chargeback fraud.
• Disadvantages Bitcoins are exchanged, meaning their value fluctuates. You will have to work with bitcoin exchanges to buy, sell and trade this virtual currency. This article provides an excellent explanation on how to start using bitcoins.

When you consider alternative payment means, make sure you look at things from all angles, including:

• Which of these payment methods is more likely to be used by your target customer?
• What characteristics of online trade do these methods support?
• What type of security do they include, for merchants and customers? 
• How many payment methods should you offer, without complicating your finalization unnecessarily?
• How do you plan to report and reconcile these payment methods?

Choose a Reliable Partner

 In some cases, deciding which payment methods to offer is easier to do with some support. Your payments partner can help you answer some of these questions and decide on which methods make more sense for your business and, equally important, which you can set aside for now.

New Call-to-action