How payment methods differ
Behind every button at a checkout is a different chain of parties and rules. The main families:
- Cards: pulled through a card scheme, with authorisation, clearing and chargebacks
- Bank transfers and pay by bank: pushed by the payer, and final once received
- Direct debits: pulled from a bank account under a mandate
- Digital wallets: some hold a tokenised card, others a balance of their own
- Buy now, pay later: a lender pays the merchant and collects from the customer
- Stablecoins and other crypto-assets: transferred on a blockchain
Why the mix of payment methods matters
Customers abandon a checkout that lacks the method they trust, and preferences are national: a method that dominates in one country can be unknown in the next. Adding each market's local methods is one of the plainest ways to raise conversion.
Methods also differ in risk. Those that run through a card scheme carry chargebacks, and push methods mostly do not.
What each payment method costs a platform to run
Every method is a separate integration and a separate routine. A platform maps each one to its own payment states, settlement files, fees, refund path and dispute process, and reconciles each differently.
A payment gateway hides that behind one interface, so a merchant adds a method by switching it on.
Payment method, payment instrument or payment rail?
- Payment instrument
- The legal term for the personalised device or procedure one user pays with, such as one particular card.
- Payment rail
- The infrastructure the money moves on: a card scheme, SEPA, a blockchain. Several methods can share one rail.
- Alternative payment method
- Any method other than a card of the international schemes.
Where a payment method shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- PayoutsMoney out to bank accounts, cards and wallets, on the rail that fits each payment.
- LedgerThe double-entry book of record behind every balance, fee and transfer.