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Payments strategy and methods: a guide for your business

Whether you’re just launching or expanding internationally, the right payments strategy can make or break your business. Understanding your customers and how they like to pay is crucial to success. And if you’re selling internationally, offering the right payment methods is an absolute must to convert shoppers at checkout.

Finding the best payment strategy is not an exact science. After all, every business is different. But there are some things that you can do to give yourself every chance of success. This includes choosing the best payment methods for your business model and knowing what your customers expect to see during the checkout process.

At Mollie, we’re here to help you grow your business. Our aim is to help you succeed. And, as we’re payments specialists, that means sharing our expertise. So, this guide is a resource that you can use to find the right online payment options for your business. It can help ensure your strategy delivers what you need – higher conversion, more sales, better experiences, and happier customers.

Use payments to grow your business

What are the benefits of offering your customers’ preferred payment methods?

• Attract new customers
• Reduce costs
• Increase your conversion rate
• Reduce fraud risks

Knowing the nuances of your markets is vital to making sure you’re meeting its needs. In the Netherlands shoppers love iDEAL, most Austrian consumers use EPS, and Cartes Bancaires is France’s go-to payment method. It’s also crucial to offer a seamless experience to progress a customer through checkout to reconciliation and aftercare.

The mix of online payment methods you choose to offer can also help you forecast and manage fraud risk. You need to offer the payment methods your customers want, but avoid adding payment methods your shoppers won’t use and that increase the risk of fraud. You can also reduce your chargeback risk by accepting payments via bank transfer payment methods, some buy now, pay later services, and e-wallets.

Types of payment methods

What are the different types of payment methods available to online stores and other businesses? Here we take a look at major and alternative payment methods.

Global card schemes

The world’s most popular way to pay, global card schemes such as Visa and MasterCard offer credit and debit cards that are accepted globally. American Express is also a global card provider that offers this mode of payment.

Bank transfer

An online payment system that allows for money to be sent to another bank account. Examples include iDEAL and SEPA Bank Transfer.

Pass-through wallets

These wallets act as electronic cards that can be used for online transactions. The card is linked to the individual’s bank account. Apple Pay and Google Pay are pass-through wallets.

Buy now, pay later (BNPL)

Customers can use buy now, pay later to purchase a product and stagger the payment date. Klarna: Pay later and in3 are examples of BNPL providers.

Direct Debit

An automatic authorisation that allows companies to debit a customer’s bank account – as long as they are given advance notice of the amounts and dates of collection. SEPA Direct Debit is a Direct Debit.

Electronic wallets (e-wallets)

E-wallets provide a digital way for people to store funds. Customers load their e-wallets with funds via bank transfer, card, or cash. They can then use their e-wallet to make payments. PayPal is an e-wallet.

Domestic card schemes

These card schemes operate in the same way as global card schemes such as Visa and Mastercard. However, the cards are only accepted in specific markets. Cartes Bancaires and PostePay are examples of domestic card schemes.

Vouchers and gift cards

Gift cards are credit card sized smart cards that users can add money to and pass on to others. The cards are usually used in specific types of shops or branches of big retail chains, including online stores, entertainment stores, and theatres or cultural centres. Vouchers also help people make online payments for different goods, including food and drink, environmental products and gifts. Find out more about vouchers and gift cards.

What are the best online payment methods for your business?

Getting your payments mix right isn’t an exact science, and an understanding of the markets you operate in is key. But whether you’re a SaaS business, online retailer, marketplace or subscription business, it will be more important to offer some payment options over others.

Global card schemes still remain the world’s most popular way to pay, but the landscape is changing. E-wallets and pass-through wallets are becoming more popular, and buy now, pay later is becoming a must-have for some online businesses. And knowing the nuances of a market – like the fact that Germany loves direct debit and 70% of Dutch consumers use iDEAL – can only help you offer the correct payment types.

The list of online payment methods isn’t getting any smaller and keeping abreast of what works where can be overwhelming. So, here we’ll take a deep dive into the best payment options for your business model and explore what each offers you.

The best payment methods for ecommerce businesses

Mollie recommends: global and local card schemes, bank transfer, wallets, buy now, pay later

These days, consumers expect a seamless experience when shopping online. Offering that during the checkout experience is paramount to reducing cart abandonment and giving them the confidence to buy. Offering shoppers the payment method they prefer is also a vital part of that process.

Debit and credit cards are the world’s most popular payment methods, and so ecommerce companies need to offer payment options such as Visa and Mastercard. In Europe, lots of countries have their own bank transfer payment methods, such as Giropay, iDEAL, and Bancontact.

If you own an ecommerce business, the checkout payment methods that you offer will be key to optimising your conversion.

As well as cards and locally preferred payment options, pass-through wallets and e-wallets are also popular with consumers, as they allow them to use their stored details with ease. Like card payments, these wallets can also be used to store a customer’s details when they pay. This means you can offer one-click payments next time they purchase from your site.

Buy now, pay later is becoming an essential payment method for many different ecommerce businesses. Consumers like it for the flexibility it gives them, while for online retailers it can help increase conversion, average order value, and provide a better customer experience. Find out more about adding buy now, pay later to your website.

At Mollie, we’re experts at providing payments to online businesses. We serve small business owners and enterprise clients, and our aim is to help all of our customers and partners to grow. We do that with a secure and effortless payments product that offers a seamless checkout experience and multiple payment methods to boost conversion. Easily integrate Mollie with your website and onboard quickly with no minimum costs, no lock-in contracts, and no hidden fees.

Find out more about payments with Mollie.

The best payment methods for SaaS and subscription businesses

Mollie recommends: cards, wallets, Direct Debit, bank transfer methods

SaaS and subscription businesses rely on recurring payments, a model which helps them guarantee cash flow and predict their future revenue stream. These businesses aim to get customers to sign up and stay. That’s because increasing a customer’s lifetime value and decreasing customer churn will always deliver long-term success.

Of course, some customers will voluntarily choose to leave. But involuntary churn – or when a customer’s subscription stops due to an unintentional issue such as outdated card details – is avoidable. And offering the right payment methods (and storing the payment details correctly) will help prevent losing customers who don’t actually want to stop using your services.

The most important thing for SaaS and subscription businesses is to think about how payment details can be stored and reused. Wallets, card schemes, and bank transfer methods all offer this: customers provide their details on a payments details page, and you can then reuse them to collect payments on a recurring basis. With Mollie, you can use many major European bank transfer methods – including iDEAL, Bancontact, and SOFORT – as direct debits to collect payments from customers.

At Mollie, our Connect for Platforms helps make SaaS payments effortless. It allows you to securely onboard your customers in minutes, add another revenue stream by offering your customers reliable payment processing, and ensures you comply with all European banking regulations.

For subscription businesses, we offer a range of integrations to help simplify payments, including advanced integrations with Chargebee and Recharge. These help with all of your subscription management and billing needs: providing an easy-to-integrate subscriptions solution to boost your business.

The best payment methods for marketplaces

Mollie recommends: global and local card schemes, bank transfer, wallets, buy now, pay later

Like ecommerce companies, marketplaces need to offer consumers a seamless checkout experience. That also means offering the payment methods that consumers prefer – local and global card schemes, market-specific bank transfer methods, wallets, and buy now, pay later.

Unlike ecommerce companies, payments work differently for marketplaces. They have to deal with a range of responsibilities and don’t want to have to spend time handling payments, carrying out manual work, managing sub-merchants, and dealing with compliance issues.

Because of all this, many marketplaces partner up with a payment processor. Teaming up with a (good) processor allows them to reduce manual work, access an easy-to-use payment product, provide support for their sub-merchants, and make sure they’re always compliant with regulations. It can be a good way for newer and younger marketplaces to get guidance around the payments strategy that can help them grow. For more developed marketplaces it offers more control.

At Mollie, our Connect for Platforms product provides a risk-free and robust payments product to help marketplaces grow. It allows you to onboard and verify sellers in minutes, automate payments and refunds, and always remain compliant with all European banking regulations.

How to add online payments to your website

At Mollie, we provide an effortless payments solution that helps all businesses to grow. We allow you to add online payment methods with ease. As payments specialists, we also help guide you to ensure you’re using the accepted payment methods and strategy for your firm.

Our secure payments product offers all leading and local European payment methods, including Apple Pay, credit and debit cards, Klarna, and more. You can add and change payment methods at the click of a button. We also provide a seamless, conversion-optimised checkout, easy and quick onboarding, and advanced features for online retailers, SaaS firms, subscription businesses, marketplaces, and other types of businesses.

Thinking of using payments with Mollie? Our easy onboarding can help you accept online payments quickly, and our transparent pricing means you only pay transaction fees for successful payments, with no minimum costs, hidden fees, or lock-in contracts.

A guide to payment methods provided by Mollie

Find out more about the different payment methods that we offer our customers.

Apple Pay

Apple Pay is a popular e-wallet that lets customers store their preferred credit and debit cards

• Type: Pass-through wallet
• Countries: Global
• Business model: Ecommerce, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

Apple’s payment method, Apple Pay, is available all over the world. Consumers place their payment cards in Apple’s Wallet app, which means that the actual payment method depends on the cards that are placed in the app. The app stores all details and preferences of the various payment cards it holds. Payment is completed with a fingerprint or face scan, which means Apple Pay complies with the Strong Customer Authentication (SCA) regulations required under the Payment Services Directive 2 (PSD2).

Credit and debit cards

Credit card payments are still the world’s most popular way to pay. For consumers, they are one of the most secure payment methods.

• Type: Global card scheme
• Countries: Global
• Business model: Ecommerce, SaaS, subscription, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

The world’s most widely used online payment method, cards allow customers to receive a line of credit and pay back the amount they spent in one go. This sum is generally paid back at the end of the month.

Many of the world’s leading credit card brands offer extensive buyer’s protection and insurance, resulting in higher conversions for online businesses. Accepting payments through credit cards allows you to sell to customers all over the world. Mollie supports all the world’s leading credit card brands, including Visa, Mastercard, and American Express.

PayPal

With PayPal, customers pay using their PayPal account. They can also use PayPal as a wallet, storing their cards for purchases.

• Type: E-wallet
• Countries: Global
• Business model: Ecommerce, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

The world’s most used online wallet, PayPal can be used as a payment method in more than 200 countries. Customers can add credit to their PayPal account or connect it to their credit card or bank account.

When using it to pay, the customer logs in and authorises the payment using their email address and password. This means that they don’t need to share any other personal or financial details. Payments can also be made through a smartphone or tablet, which allows customers to pay anywhere with ease.

Customers can reimburse the purchase amount if they don’t receive an item or if they receive an item that doesn’t fit the description. Sellers are protected against receiving fraudulent payments and false claims of products not being delivered. This all helps PayPal act as a safe and easy way for customers to make online payments that protect the buyer and seller.

PayPal is also quickly expanding beyond webshops to ticket-buying platforms, travel agencies and marketplaces. It can also be used to receive recurring payments for subscription customers.

SEPA Bank Transfer

SEPA Bank Transfer is a secure European cross-border payment method available in 34 countries.

• Type: Bank transfer
• Countries: Europe wide
• Business model: Ecommerce, SaaS, subscriptions, marketplaces
• Recurring payments: No
• Refunds: Yes
• Partial refunds: No
• Chargebacks: Yes

The Single Euro Payments Area (SEPA) was introduced by the European Council to streamline the structure of European payments. With SEPA, transfers can be done from any European checking account to any other European checking account. It offers a familiar and safe way for customers to pay online – using their trusted online banking environment to transfer money. It is especially popular in the Netherlands, Belgium, France, Germany, and Poland.

The EU developed SEPA and implemented the adoption of consistent and uniform bank account numbers called IBAN. This allows for the quick processing of transfers and equal costs for bank transfers across borders, allowing merchants to receive payments from customers all over Europe. Customers benefit from widespread availability, quick payment processing and low transaction costs. Payments are usually settled within 1-3 business days.

SEPA Direct Debit

SEPA Direct Debit is a European payment method offering one-off and recurring transactions.

• Type: Direct Debit
• Countries: Europe wide
• Business model: SaaS, subscription
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

SEPA Direct Debit makes it possible to collect recurring payments – including subscription fees or monthly payments – easily. It also makes it easy for creditors to collect funds from a payer’s accounts, such as for one-click payments and amounts due in instalments. All of this is possible throughout 36 European countries, making it a powerful tool for subscription businesses operating around Europe.

To collect recurring funds using SEPA Direct Debit, a customer needs to provide a signed mandate. With Mollie, mandates can be signed through iDEAL, Belfius, credit card, Bancontact, SOFORT Banking, and the KBC/CBC Payment Button. SEPA Direct Debit is widely used in Germany and the Netherlands.

Klarna: Pay later

Klarna: Pay later allows customers the flexibility to settle their invoice up to 30 days after their purchase.

• Type: Buy now, pay later
• Countries: Global
• Business model: Ecommerce, marketplaces
• Recurring payments: No
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

Klarna is a flexible payment solution that is becoming more and more popular with online shoppers. By allowing more flexibility, it can help increase conversion rates and average order value. It also helps deliver a better customer experience and attract new customers who may prefer to use buy now, pay later methods to pay.

Klarna covers all fraud and financial risks that arise when offering your customers the option to pay later. Once an order has been shipped, Klarna pays you in full even if the customer still needs to settle their account. Pay later does not accept sales of digital products and services or facilitate business-to-business payments. Pay later is available for customers residing in the Netherlands, Austria, Germany, Belgium and Finland.

Klarna: Slice it

Klarna: Slice it is a popular buy now, pay later (BNPL) solution, offering customers the flexibility to stagger payments for up to three years.

• Type: Buy now, pay later
• Countries: Global
• Business model: Ecommerce, marketplaces
• Recurring payments: No
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

Like Pay later, Klarna: Slice it is a flexible payment solution that can help increase conversion rates and average order value. It also helps to attract new customers who may prefer to use BNPL methods to pay and improves customer experience by offering them more flexibility. Customers can pay using flexible payment plans that span between 3-36 months.

Klarna: Slice it is a guaranteed payment method; once the purchase is shipped, Klarna will pay you in full. Slice it does not accept sales of digital products and services or facilitate business-to-business payments. It is available for customers residing in the Netherlands, Austria, Germany, Belgium and Finland.

Klarna: Pay now

Klarna: Pay now is a safe and flexible payment method that customers can use to pay by online bank transfer or a direct debit order.

• Type: Direct Debit/Bank transfer
• Countries: The Netherlands, Belgium, Germany, Austria, Finland
• Business model: Ecommerce, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

With Klarna: Pay now, customers can pay for one-off transactions instantly using their own online banking details through bank transfers or direct debit orders. Online businesses are protected against customer non-payment risk and are paid out five business days after an order is shipped. Thanks to real-time transaction confirmation, you can dispatch goods immediately and guarantee the payout – Klarna takes the risk of payment default and fraud for you.

Klarna: Pay in 3

With Klarna: Pay in 3, you can offer your customers the choice of paying in three interest-free instalments over 60 days.

• Type: Buy now, pay later
• Countries: Global
• Business model: Ecommerce, marketplaces
• Recurring payments: No
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

With Klarna: Pay in 3, customers can pay using their VISA or Mastercard cards (both credit and debit) or Direct Debit over three interest-free instalments. As a merchant, you are protected against customer non-payment risk and get paid out five business days after you mark the order as shipped. That means you can dispatch the goods to your customers quickly and reap the rewards of payout guarantees.

During checkout, the customer selects Klarna: Pay in 3. The relevant order information from your online shop is automatically carried over to the secure Klarna payment form. Customers either have to provide their banking credentials or create a Klarna account to confirm the payment, making the payment process very easy.

SOFORT Banking

A hugely popular European payment method that allows customers to use their online banking credentials to transfer money.

• Type: Bank Transfer
• Countries: Austria, Belgium, Germany, Italy, the Netherlands, Poland, Spain, Switzerland
• Business model: Ecommerce, SaaS, subscription, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: Yes

SOFORT Banking is a payment method used across Europe that allows shoppers to make payments without having to create an account. It is an ideal payment method for European expansion and – as a trusted and easy way of paying online – can drive conversions for online businesses.

Tens of thousands of businesses already use SOFORT, and it has a 15% market share for bank transfers in Germany. It is a guaranteed payment method, and recurring payments are handled via the SEPA Direct Debit scheme. SOFORT cannot be used for the sale of digital gift cards, phone cards, or gambling credit.

iDEAL

iDEAL is a guaranteed online bank transfer payment option supported by all major Dutch consumer banks.

• Type: Bank transfer
• Relevant countries: Netherlands
• Business model: Ecommerce, SaaS, subscriptions, marketplaces
• Recurring payments: Yes, via the SEPA Direct Debit scheme
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: No

iDEAL is the most popular payment method in the Netherlands – Around 70% of Dutch online shoppers use iDEAL frequently. It is a trusted, secure and convenient way for shoppers to pay online. Customers transfer money directly from their bank account, guaranteeing a successful payment that can’t be reversed by the customer. The customer’s bank guarantees that the transaction is secure.

Customers can also safely pay using QR-codes and payment requests shared through an invoice, WhatsApp, or SMS. With Mollie, you can start receiving iDEAL payments within 10 minutes, and you only pay for successful transactions.

Bancontact

Bancontact is the most popular payment option for online and point-of-sale purchases in Belgium.

• Type: Bank Transfer
• Countries: Belgium
• Business model: Ecommerce, Saas, subscription, marketplaces
• Recurring payments: Yes
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: No

Bancontact processes more than 150,000 transactions a day, making it the most used payment method in Belgium. In addition to online payments, it offers a wide variety of payment services such as in-store card transactions. This means Bancontact is a well-known, trusted, and growing payment method.

By offering Bancontact as a payment method, you can take advantage of this growing user base. Bancontact payments are guaranteed, confirmed immediately, and always protected by 3D-secure technology. In 2015, Bancontact introduced an app that makes paying online even easier.

KBC/CBC Button Payment

KBC/CBC is a payment method for two of Belgium’s largest banks and reaches millions of Belgian shoppers.

• Type: Bank transfer
• Countries: Belgian
• Business model: Ecommerce, marketplaces
• Recurring payments: No
• Refunds: Yes
• Partial refunds: Yes
• Chargebacks: No

The KBC/CBC Payment Button is an online payment method for customers of the KBC and CBC. When customers pay through the KBC/CBC Payment Button, they transfer the payment directly from their own trusted online banking environment.

A secure and guaranteed payment method, it allows users to pay amounts between 50 and 1,250 euro up to two months later, which drives conversions. Customers can choose when the amount is withdrawn from their accounts, but merchants are credited instantly. As a merchant, you’ll receive the full amount as KBC/CBC pre-finances the amount due on behalf of the customer.