17 October 2023
Fuel business growth by embracing the world’s most popular payment methods.
In today's interconnected world, the landscape of payment methods is constantly expanding and evolving. Gone are the days of relying solely on cash; businesses now need to understand a range of payment options to thrive – from credit cards to bank transfers to e-wallets and mobile payments. In this blog, we delve into some of the world’s most popular payment methods, examining the pros and cons, associated fees, and security aspects of each option to help your business navigate the world of payments for optimal growth.
Credit & Debit cards
Widely accepted in many countries around the world, credit and debit cards are the most commonly used payment method globally1, according to The Nilson Report. This makes them an essential inclusion for any growth-focused business.
Some of the most well-known credit card brands include Visa, Mastercard, Discover®, Diners Club International®, each offering unique benefits and drawbacks.
Globally recognised, Visa and Mastercard stand as the most widely accepted credit cards, making them popular for travellers. They offer consumers a wide range of perks, such as reward points, unmatched convenience, and exclusive partner benefits, like discounts and special offers.
Importantly, these card schemes offer world-leading fraud protection as standard, making them a compelling choice for businesses seeking to reduce risk and protect their reputation. With a broad customer base and high levels of brand awareness, Visa and Mastercard acceptance has the potential to uplift your business by enhancing credibility and consumer trust.
On the other hand, debit cards, only allow users to spend funds they have in their accounts, making them a great option for those who want to avoid overspending. They also offer fraud protection and often have lower processing fees than credit cards – a benefit for businesses looking to save on the cost of transactions.
Global payment networks
As an alternative, merchants who enable Discover® Global Network can welcome cardholders such as Discover, Diners Club International, RuPay, BC Card, Troy and many more.
Domestically issued cards, like RuPay, BC Card and Troy, are frequently used by international consumers for everyday expenses. This makes them a great option for merchants looking to draw in customers from key tourist markets like India, South Korea, or Turkey.
For other travellers seeking seamless payment experiences abroad, Discover® Cardholders enjoy the advantage of zero foreign transaction fees. This makes it a great option for overseas transactions. Also offering perks for the discerning traveller as well as for everyday local spend, Diners Club International Cards cater to consumers primarily in the premium space who want access to a range of exclusive features and benefits2, such as global lounge access and Wi-Fi.
These cards allow businesses to tap into a more diverse share of the global market. With a customer base of over 305 million cardholders worldwide3 and a unique global alliance network that unlocks entry to regional card schemes – like Japan’s JCB, India’s RuPay, and China’s UnionPay –Discover Global Network is a gateway to broadening your business reach and attracting international travellers to your business.
Mobile payments & e-wallets
With the rise of smartphones, mobile payments have become increasingly popular. Mobile payments are any payment made through a mobile device, such as e-wallets/digital wallets, contactless mobile payments or QR codes.
E-wallets allow users to link their bank account or credit card to their e-wallet account and make payments through their mobile device – making it incredibly easy to make payments on the go.
They also offer security features such as fingerprint or face recognition, making them a secure option for users, and benefits businesses by bolstering fraud risk. Some also provide peer-to-peer and split payments, making them an excellent choice for group purchases.
E-wallets are becoming increasingly popular globally, with a projected global transaction value of over USD$4.6 trillion in 2023, according to Statista4. Some of the most popular digital wallets include PayPal, WeChat Pay, Apple Pay and Alipay.
Alipay is a mobile payment app with over one billion active users across the Asia Pacific and beyond. It allows users to pay for goods and services, transfer money to friends and family, and even invest in financial products through their mobile devices. It also offers features such as bill payment and credit score tracking.
While digital wallets are incredibly convenient for consumers, they’re yet to be accepted everywhere. Some merchants may charge additional fees for mobile payments. But with today's consumers expecting to pay any way they want, the ability to accept mobile payments of all kinds is increasingly essential and can be a powerful competitive differentiator for businesses looking to enhance their customer experience.
Cash is still widely used worldwide, particularly in countries with developing economies where electronic payment systems are not widespread. Additionally, many people in developing nations are still underbanked and lack access to financial services and bank cards.
For consumers, carrying cash for small purchases may be convenient, but it can also be risky as it is easily lost or stolen. Unlike electronic payments, however, cash offers a high level of privacy, which can appeal to some.
For businesses, cash offers a fee-free payment option and provides a fail-safe guarantee against network failures, as there is no need to depend on external factors, such as connectivity or technical issues. Plus, you virtually get rid of any chargeback risks, reducing potential financial disputes and simplifying financial management.
But there are downsides, too.
Physical cash can be lost or stolen and carrying or storing large amounts of it on business premises, can make you a target. For consumers, when it comes to large purchases – such as a hotel room or a plane ticket – carrying a large amount of cash can be inconvenient. As such, consumers tend to carry a limited amount of cash for smaller purchases, which could potentially lead to lower spending and fewer sales for your business, when compared to electronic payment methods.
In contrast to electronic payment methods, cash doesn’t offer security features like passwords and encryption. It also lacks the rich transactional data provided by electronic payments, making it difficult to track sales and consumer behaviour.
For all these reasons, accepting a mix of cash and other payment methods, such as credit or debit cards, is a good idea. That way, you open your business up to more customers and more sales opportunities.
Bank transfers are a convenient and secure way to transfer money from one bank account to another, which can be handy for high-value or business-to-business transactions.
For merchants, bank transfers have lower processing fees, thus positively impacting profit margins. They can be done remotely without the need for a physical store. It also accommodates international transactions, making it easier to serve a global customer base.
For the payer, bank transfers provide greater control over their funds, and provide a secure and efficient method to pay, particularly for larger purchases and especially as innovations, such as the NPP, are broadening access to real-time payments through bank transfers.
On the other hand, for those without NPP or specialist software, traditional processing times, and manual reconciliation can discourage businesses from accepting bank transfers.
It's a big world with a lot of different payment options.
Whether in cash or electronic blips in a digital payment system, money makes the world go around. Taking and making payments is critical to every individual and every business.
To learn more about the host of payment methods that humans use to pay for goods and services and transfer value, just Google any of these methods mentioned above. Or, to learn more about the preferences for different payment methods around the world, visit https://www.weforum.org/agenda/2021/01/this-chart-shows-cash-cashless-finance-payment-methods-global-preference/
And remember, at the end of the day, the more payment methods you accept, the more growth you stand to experience for your business.
2. Diners Club product offerings, features and benefits vary by local issuer.
3. Discover Global Network participation and RBR Global Payment Cards Data and Forecasts to 2027, September 2022