Payment method

What is a payment method?

A payment method is the way a customer chooses to pay at checkout, whether for a one-time order or a recurring subscription. Common options include credit and debit cards, digital wallets (Apple Pay, Google Pay, PayPal, Shop Pay), bank transfers and ACH or direct debit, Buy Now, Pay Later (BNPL), mobile payments, and, in some niches, cryptocurrency. Each payment method a merchant accepts is processed through a payment gateway, which authorizes the transaction with the customer’s bank, card network, or wallet provider.

The mix of payment methods you offer at checkout directly affects conversion rates, average order value, and how many international shoppers can actually complete a purchase on your store.

Why are payment methods important?

Offering the right mix of payment methods reduces friction at checkout and meets customers where they already pay. The right combination can:

• Lift conversion rates by removing one of the most common reasons for cart abandonment, which is shoppers not seeing their preferred way to pay.
• Support cross-border transactions when paired with locally trusted methods.
• Build trust at checkout through familiar logos and visible security cues.
• Enable recurring billing in subscription models, since storing a customer’s payment method on file is what allows the merchant to charge automatically on each renewal without re-entry.

For DTC and Shopify merchants, aligning the checkout with customer preferences is one of the simplest levers for reducing abandonment without touching pricing or product.

Types of payment methods

The most common types of payment methods used in ecommerce today:

• Credit and debit cards: the most widely used method globally, accepted through Visa, Mastercard, American Express, and Discover.
• Digital wallets: PayPal, Apple Pay, Google Pay, Shop Pay, and Amazon Pay. These store payment details once and tokenize them for fast repeat checkout.
• Bank transfers and ACH or direct debit: pull funds directly from a customer’s bank account. ACH payments are popular with subscription merchants because of lower transaction fees and stronger long-term authorization rates than cards.
• Buy Now, Pay Later (BNPL): Klarna, Afterpay, and Affirm. Splits a single order into installments and is often used to lift AOV on higher-priced items.
• Mobile payments: UPI (India), Alipay, WeChat Pay, and GCash. Dominant in specific regions.
• Cryptocurrency: Bitcoin, Ethereum, and stablecoins. Still niche for most consumer ecommerce.

Selecting the right payment methods depends on your customers’ geography, your average order value, and your business model. A subscription brand will typically prioritize stored cards and ACH; a high-AOV apparel brand may add BNPL; a globally distributed store will layer in locally dominant wallets.

Example of payment method

A customer is checking out on a Shopify electronics store. At the payment step they see several payment methods: credit card, Shop Pay, PayPal, Apple Pay, UPI, and Cash on Delivery. They pick UPI, approve the request on their phone, and the order confirms instantly. If they had chosen a “Subscribe and save” option instead of a one-time purchase, the store would have saved their selected payment method on file and charged it automatically on every future renewal.

Driftcharge Tip

Don’t try to support every payment method, support the right ones. Audit your checkout against your top customer regions, business model, and average order value: stored cards plus ACH for subscription stores, BNPL for higher-priced one-time orders, and locally dominant wallets for international shoppers.

Ganesh Pawar

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Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.