eCommerce has opened the door for businesses to sell products and services worldwide. But none of that works without a reliable way to get paid. That’s where eCommerce payments come in.
In
this guide, we’ll break down what eCommerce payments are, how they work, and
what you should know when choosing a payment system for your online store.
Whether you're just starting out or looking to optimise your checkout, you'll
get the essentials without the jargon.
What Are eCommerce Payments?
An
eCommerce payment is any digital transaction made through an online store, on a
website or via mobile browser. For example, when a customer places an order and
pays through your website, that’s an eCommerce payment.
It
covers all types of payment methods: card payments, open banking, bank
transfers, digital wallets, and even buy now, pay later services. These
payments happen entirely online, which means they require a secure and
efficient way to collect, process, and settle funds.
How eCommerce Payments Work
Here’s
what happens behind the scenes:
- Customer adds items to the cart and proceeds to checkout.
- Payment
info is entered (card details, bank login, or wallet authorization).
- The system
processes the transaction securely, often through a payment gateway.
- Funds are
transferred from the customer’s account to the merchant’s account.
- The merchant receives confirmation and prepares the order
for delivery.
This
entire process happens in seconds. A smooth checkout experience is key to
successful customer conversion. If the checkout is full of friction, this can
result in the high rate of shopping cart abandonment.
Types of eCommerce Payment Methods
Here
are the most common options modern customers expect:
● Debit and Credit Cards: Still the most popular method. Visa, Mastercard, and others are widely accepted. Fast, familiar, but can come with high processing fees.
● Pay-by-Bank: Open banking allows shoppers to pay directly from their bank account. It’s gaining traction in Europe due to lower fees and instant settlements.
● Digital Wallets: Think of Apple Pay, Google Pay, or PayPal. These allow fast checkout without entering payment details each time.
● Buy Now, Pay Later: This lets customers split payments into installments or delay the charge. It can increase conversion but comes with merchant fees.
● Cryptocurrency (Optional): Some stores accept crypto payments, but this is still niche and depends on your audience.
● Local Payment Methods: Depending on your geographic reach, there will be specific payment methods popular in your customer’s country. It’s important to make proper research about your customers in advance, to not disappoint them.
What Is a Payment Gateway?
A
payment gateway is the tech that connects your store with your customer’s
payment method. It securely sends the transaction details to your payment
provider and returns the result.
It’s
like the cash register of your online store. You can’t take payments without
it.
Gateways
can support multiple payment types and offer tools like fraud detection,
analytics, and multi-currency support.
Choosing the Right Payment Methods for Your Store
Not
every store needs every payment method. Here’s how to decide what to offer:
● Know your customers. As mentioned above, you should
conduct thorough research about your potential clients. Younger shoppers may
prefer wallets or BNPL. B2B clients might need bank transfer options.
● Consider geography. Popular methods vary by region. Some countries prefer
local payment options.
● Balance cost and convenience. Card payments are easy but pricey.
Pay-by-bank is cheaper but may be less familiar.
● Keep it simple. Don’t overload your checkout. Offer 2–3 core options
and expand based on demand.
Security: Keeping eCommerce Payments Safe
Handling
money online comes with risk of fraud. In fact, online card fraud in the UK
cost £225 million in 2024, which is 11% more than the year before. This type of
fraud, where the card isn’t physically used, is still the biggest cause of card
fraud losses.
Here’s
how to keep your online store and your customers safe from fraud:
● Use HTTPS: This encrypts data between your site and users, protecting
sensitive information like card details from being intercepted.
● Work with PCI-compliant providers: These payment processors follow
strict security standards, helping you stay on the right side of regulations
and reducing your risk of breaches.
● Enable built-in fraud protection: Most payment gateways include tools
like transaction monitoring, risk scoring, and automatic flagging. Make sure
these features are switched on and properly configured.
● Offer secure, bank-authenticated payment options: Methods like 3D Secure or
digital wallets add extra layers of verification, making it harder for
fraudsters to slip through. Open banking is also a very secure payment method,
as it offers bank-level security, and multi-factor authentication, often
biometric.
Mobile Payments and One-Click Checkout
With
about 60% of UK online purchases now made on mobile devices, a seamless mobile
checkout experience is essential for customers. Research shows that mobile
users are far more likely to abandon their carts if the process is clunky or
slow.
Make
sure your payment system is fully mobile-optimised. Features like one-click
checkout, digital wallets (e.g. Apple Pay, Google Pay), and securely saved
payment details significantly reduce friction and boost conversion.
In fact, studies suggest that streamlined checkouts
can increase sales by up to 35%. If buying takes more than a few taps, many
users simply won’t bother.
Multi-Currency and International Payments
If
you’re an international merchant selling globally, there’s more to consider. A
localised payment journey, offering both local currency and language, is a
proven way to build trust and boost sales.
● Support local currencies and languages: Research from Shopify shows
that displaying prices in a shopper’s local currency can increase conversion
rates by over 40%. Customers are far more likely to complete purchases when
pricing feels familiar and transparent.
● Enable automatic currency conversion: This removes friction and
guesswork. Clear, real-time pricing helps reduce cart abandonment, especially
in regions where currency volatility is a concern.
● Offer local payment methods: A big chunk of global e-commerce
transactions now happen via local payment methods (like iDEAL in the
Netherlands, Boleto in Brazil, or Alipay in China). If you only offer cards,
you’re likely missing out on sales.
● Watch for hidden international fees: Some providers charge extra for
cross-border processing, dynamic currency conversion, or foreign exchange.
These fees can eat into your margins or surprise your customers. Look for
transparent, multi-currency pricing from the start.
● Leverage open banking: Open banking enables fast, low-cost
international payments directly from customers’ bank accounts. It offers wide
bank coverage, strong security, and reduces fees and fraud, making it ideal for
cross-border payments.
Settlement and Payout Timing
After
a customer pays, when do you get the money? That varies.
● Instant settlement: Some gateways—especially those using open banking or real-time bank transfers—can settle funds within minutes, giving you immediate access to cash.
● Card payments: These typically take 1–3 business days, depending on the provider and the customer’s bank.
● Holding periods & payout thresholds: Some platforms delay payouts for new merchants, high-risk industries, or large transactions. Others require you to hit a minimum payout amount before releasing funds.
● Why it matters: Faster access to funds improves cash flow, letting you reinvest in stock, ads, or operations without waiting days for payments to clear. For high-volume stores or tight-margin businesses, this speed can make a big difference.
Payment Fees to Expect
Payment
processing always comes with costs. Common fees include:
● Per-transaction fees: A fixed amount, a percentage of the
sale, or both.
● Monthly account fees: Some providers charge just to keep
your account open.
● Currency conversion fees: For cross-border or multi-currency
sales.
● Refund and chargeback fees: You may be charged even when a
transaction is reversed.
Watch
the fine print—some platforms offer low base rates but add extra fees for
payouts, fraud tools, or support. Always compare the full cost, not just the
headline rate.
Open Banking and the Future of eCommerce Payments
As
mentioned above, open banking is reshaping how online payments work, especially
for international payments. By enabling direct and instant bank-to-bank
transfers, it cuts out card networks entirely. Customers authenticate payments
right in their trusted banking app!
The
numbers speak for themselves. As of March 2025, 13.3 million people and small
businesses in the UK use open banking. That’s about 1 in 5 of everyone who has
online access to their bank account.
Why merchants switch to open banking:
● Lower fees – no intermediaries mean better margins
● Instant settlement – improves cash flow
● No chargebacks – reduces risk and admin
● Strong authentication – lowers fraud
It’s
especially useful for e-commerce payments, where cost, smooth UX, and
reliability really count. Adoption is growing fast—this is one to watch.
How to Get Started with eCommerce Payments
Setting up payments doesn’t have to be overwhelming. Start with the essentials, then refine as you grow:
- Choose your platform: Whether it’s Shopify, WooCommerce, or another CMS, make sure it integrates smoothly with trusted payment providers and supports the features you need (like subscriptions or international sales).
- Pick the right payment gateway: Match your gateway to your market. For example, open banking providers for smooth UX and strong European adoption. Look for features like fraud tools, currency support, and clear pricing.
- Start with 2–3 core payment methods: Cover the basics: open banking, card payments, Apple/Google Pay, and maybe one local method if relevant. Don’t overwhelm users with options at first.
- Test the full checkout experience: Run through it yourself, on desktop and mobile. Is it smooth? Fast? Does the confirmation page and email feel trustworthy?
- Track conversions and payment performance: Use analytics to spot
drop-offs and understand which payment methods convert best. This data
will guide your next steps.
