Top eCommerce Payment Methods: Cards, eWallets & Bank Transfer

Top eCommerce Payment Methods: Key Insights

• Global Leaders: Visa leads eCommerce payment methods, followed by Mastercard, with PayPal, American Express, and bank transfers also widely used.

• Closer Look at Providers: Visa dominates eCommerce with 90% adoption, using tokenization for security. Mastercard, at 89%, enhances security with AI and open banking. PayPal, used by 65%, is known for ease and strong security. American Express, accepted in over 130 countries, appeals to premium brands with high-security and flexible financing. Bank transfers and cash in advance offer security but involve more steps and potential fraud risks.

• Regional Preferences: Local payment methods dominate in China and South Korea, while Visa, Mastercard, and PayPal are more popular in the U.S. and UK. South Korea favors bank transfers (85%) and Japan follows the global trend.

Shopping online, we usually have multiple ways to pay: Cards, eWallets, and even bank transfers.

Visa, for instance, is used by 90% of stores, but what makes it so popular? How do Mastercard and PayPal compare? What about the reliability of American Express or traditional methods like bank transfers?

For customers, knowing the pros and cons of each can help them choose the best way to pay. For businesses, understanding why these methods are favored can boost sales. Let’s break down these options and see why they are the top choices for online retailers.

Top eCommerce Payment Methods:
Cards Still Lead

Based on ECDB data, cards dominate the eCommerce payment method landscape. While eWallets are also popular, more traditional methods like bank transfer and cash in advance are still in use:

• Offered by 90% of online stores in our database, the American multinational payment card services company Visa is the leading payment method in the eCommerce market.

• Mastercard follows closely at number 2, offered by 89.7%.

• The eWallet platform PayPal is used by about two thirds (65.6%) of online stores worldwide.

• Another card on our list, American Express, is ranked fourth with 51.9% usage rate.

• Bank transfer / cash in advance rounds out the list, utilized by 41.8% of online stores globally.

Let's take a closer look at each payment method and better understand the market dynamics.

1. Visa

Visa remains a dominant force in the eCommerce payment space, favored by 90% of online stores in our database. The company leverages advanced tokenization technology, which has significantly enhanced transaction security and efficiency. As of 2024, Visa's tokenization has generated over US$40 billion in incremental eCommerce revenue and prevented US$650 million in fraud.

Visa's commitment to innovation extends to its infrastructure, promoting a more seamless and secure transaction process. Their tokenization replaces sensitive payment information with cryptographic keys, making digital transactions safer and boosting approval rates globally. Currently, 29% of all Visa transactions use tokenization, reflecting its widespread adoption​.

In addition to security, Visa's interoperability efforts have transformed the payment experience by integrating various payment methods and networks. This ensures that Visa remains a top choice for both consumers and merchants, providing convenience and reliability in every transaction​.

2. Mastercard

Mastercard also holds a prominent position in the eCommerce payment arena, accepted by 89.7% of online stores globally. This widespread acceptance is due to Mastercard's innovative approach to digital payments, which focuses on security, convenience, and cutting-edge technology.

One of Mastercard's key innovations is its tokenization technology: Mastercard aims to achieve 100% eCommerce tokenization in Europe by 2030, enhancing both security and user experience​.

Mastercard is also leveraging artificial intelligence (AI) to further revolutionize the payment process. AI is used to enhance security measures, detect fraudulent activities, and personalize user experiences. In 2023, Mastercard's AI-driven systems protected over 125 billion transactions.

Additionally, Mastercard is at the forefront of the open banking movement. Through partnerships with companies like Nexi, Mastercard is facilitating seamless, secure account-based payments across Europe. This technology allows consumers to initiate payments directly from their bank accounts, enhancing speed and security​.

Mastercard's dedication to innovation extends to embracing new payment methods such as contactless payments, biometrics, and digital currencies​.

3. PayPal

Another key player in eCommerce payment, PayPal is used by 65.6% of online stores globally. Known for its ease of use and strong security, PayPal offers a variety of features that enhance the shopping experience. It supports multiple payment methods, including credit cards, debit cards, and bank transfers, and integrates seamlessly with major eCommerce platforms like Shopify and WooCommerce.

Security is a top priority for PayPal, with encryption and fraud detection tools protecting transactions. PayPal also provides buyer and seller protection policies to cover eligible transactions in disputes or fraud cases. The platform’s Buy Now, Pay Later option has grown significantly, appealing to consumers seeking flexible payment solutions.

With a presence in over 200 countries and support for multiple currencies, PayPal enables businesses to reach a global audience, making it an essential tool for international eCommerce.

4. American Express

American Express, often referred to as Amex, boasts acceptance in over 130 countries worldwide. The higher spending power of Amex cardholders makes it particularly appealing to premium and high-end brands.

To safeguard customer data and prevent fraud, Amex uses advanced security measures including encryption, tokenization, and multifactor authentication. The SafeKey 3D Secure feature further enhances security for online transactions.

American Express provides a range of financing solutions, such as the "Plan It" feature, which allows cardholders to pay off purchases in installments. This option can help boost sales by making high-value purchases more affordable.

Amex also delivers detailed transaction reports and data insights, enabling merchants to better understand customer behavior and tailor their marketing strategies effectively.

5. Bank Transfer / Cash in Advance

Bank transfers and cash in advance are traditional eCommerce payment methods. Bank transfers involve the direct transfer of funds from a shopper’s bank account to a merchant’s account, initiated either online or offline. This method is straightforward and accessible to anyone with a bank account. However, it requires the shopper to initiate the transfer and wait for the funds to be received before the merchant processes the order.

Cash in advance necessitates that buyers pay for goods before they are shipped. This method places the financial risk on the buyer but ensures that the seller receives payment upfront, making it a secure option for merchants. It is commonly used for low-value orders and in markets where credit and debit card usage is limited.

Both methods can offer high security, particularly in reducing the risk of chargebacks, but they are not entirely free from fraud risks. Bank transfers are generally irreversible, which can protect merchants but can also expose buyers to potential fraud if the merchant does not deliver the goods. Similarly, cash in advance transactions can be risky for buyers if the seller is not trustworthy. These methods also reduce the need for intermediaries, potentially lowering transaction costs, although the additional steps and waiting periods can be less convenient for customers.

Top eCommerce Payment Methods in
Top eCommerce Markets

Looking at the use of these top eCommerce payment methods (by number of online stores) in the top eCommerce markets, we see the dominance of the United States.

The study from Statista and BuiltWith shows that the U.S. market has the highest number of online stores using each top payment method. While the UK has the second count for each top payment method, Japan comes in third.

What about the internal eCommerce payment dynamics of each top market?

Local eCommerce Payment Methods Dominate
in China and South Korea

While local players like Ali Pay (used by 72% of online stores), WeChat (61%) and Union Pay (31%) are popular in China (with both Visa and Mastercard at 31%), the eCommerce payment method usage in the United States reflects the global trend closely: Visa with 96%, Mastercard 95%, American Express 90% and PayPal at 77%. The only different payment provider in the top 5 eCommerce payment methods in the U.S. is Discover Card (81%), a credit card by the American chain of department stores Sears.

Like the U.S., the UK market is also in line with the global trend in regards to top eCommerce payment methods: Both Visa and Mastercard are used by 97% of online stores, PayPal and American Express follow with 82% and 61% respectively. Apple Pay sticks out as the top 5th payment method in the country, with 19% of online stores in our data base utilizing the payment method.

South Korea differs from other markets in the top 5, as bank transfer / cash in advance is the top eCommerce payment method by far (85%). While local payment solutions Kakao Pay (39%) and Naver Pay (35%) are also in the top 5, instant bank transfer (37%) and Payco, the U.S. based limited liability company (33%), are other popular payment methods.

eCommerce payment trends in Japan stand close to those of the U.S. and UK: Visa and Mastercard are at the top with 95% and American Express has a usage rate of 88%. Tokyo-based credit card company JCB (Japan Credit Bureau) is at number 3 with 92%, while the American charge card company Diners Club is the top 5th eCommerce payment method.

Top eCommerce Payment Methods:
Closing Thoughts

The future of eCommerce payment methods will be shaped by advancing technologies and evolving consumer preferences.

We can expect a continued rise in the use of digital wallets and mobile payments, driven by their convenience and security. Innovations like AI and blockchain will enhance fraud prevention and transaction efficiency. Open banking and real-time payments will likely gain traction, offering faster and more flexible payment options.

As global eCommerce grows, we may also see increased adoption of cryptocurrencies and decentralized finance solutions, catering to tech-savvy consumers and expanding the digital payment ecosystem.

Sources: Visa: 1, 2, Mastercard: 1, 2, 3, 4, PayU Global, Adyen, Amex, Stripe, The Paypers, CompaniesMarketCap, Statista: 1, 2, 3, 4, ECDB