The choice of payment method can significantly impact a small business, including its conversion rates, cash flow, and the ease of expansion into new markets.
The first step to making the decision is understanding the payment market.
Over the past decade, online payments have grown rapidly in Europe. This change can be attributed to widespread smartphone adoption, more reliable networks, and regulatory changes. The Revised Payment Services Directive (PSD2) helped build consumer trust by introducing stronger authentication and giving users more control over their financial data.
As a result, most consumers are comfortable paying online, and they expect options. But not all payment methods are created equal—each comes with different costs, customer expectations, and technical requirements
In this guide, you’ll learn about the best online payment methods for small businesses, the pros and cons of implementing each one, and tips for selecting them.
Key takeaways
- Digital wallets are the number one option for online payments.
Today, e-wallets are the most frequent payment solution for online shoppers in Europe and beyond. Other popular options include payment cards, bank transfers, BNPL, direct debit, QR codes and links, and cryptocurrency.
- Each method has its own set of upsides and downsides.
For example, bank transfers are the most affordable for merchants but can be slow. Also, BNPL boosts order value and conversions but can disrupt cash flow.
- Research before you select your payment methods.
Choose your payment methods based on your customers’ preferences, location, and age. Analyze competitor trends and consider your business needs and budget.
- Paypercut simplifies payment setup and management.
Instead of signing multiple contracts and dealing with separate integrations, opt for Paypercut and have everything in one place. Paypercut lets you get started within days, manage 12+ currencies, and scale across Europe with ease.
Top online payment methods for your small business
The seven payment methods below are among the most popular for online purchases in Europe. Each has its strengths and limitations—the right mix depends on your customers, your products, and your capacity to manage them.
1. Digital wallets
Digital wallets, or e-wallets, let consumers store payment information safely on their devices and make online and POS transactions quickly, without having to enter payment details on every website. Because of their convenience, e-wallets are the most popular payment method for online purchases today, both in Europe and globally.
The most prevalent providers are Apple Pay and Google Pay, but preferences vary by country. For example, Polish shoppers prefer the local BLIK over these solutions.
Usage of e-wallets has increased rapidly over the last few years, and experts predict this trend will continue. The European mobile wallet market is expected to reach 31 billion USD in 2033, growing at a whopping 27.21% annually.
2. Payment cards
Payment cards have been popular for decades and have grown more popular over time. While they’re the dominant choice for POS payments, they are also commonly used for online shopping. Consumers trust them because they're familiar, widely accepted, and come with built-in fraud protection.
In most European countries, debit cards are more common for online shopping than credit cards. The biggest reason is likely avoidance of debt and greater control over spending.
Some consumer segments, such as younger individuals without a bank account, often use prepaid and gift cards for online shopping.
3. Bank transfer
Bank transfers, or account-to-account (A2A) transfers, allow customers to pay directly from their bank account to yours, bypassing card networks entirely. Over the years, they have become more popular among European online shoppers. This is partly due to open banking regulations that make these transactions faster and more secure.
In Europe, SEPA (Single Euro Payments Area) enables euro transfers across 41 countries. One type of transfer—SEPA Instant Credit Transfer—makes funds available in less than 10 seconds.
4. Buy Now, Pay Later (BNPL)
BNPL lets eligible customers split purchases into installments. This method enables them to access pricier products without having to set aside a large sum upfront. It also benefits your business by expanding its reach, improving conversion rates, and increasing average order value.
In Europe, BNPL use has grown at 25.5% annually since 2022 and continues to expand due to new regulations and more banks entering the space.
BNPL can carry higher fees than cards, though many providers pay merchants upfront, which can support rather than disrupt cash flow. If you sell high-value products or services, charging interest could help offset the risks and costs. Digital wallets are the number one option for online payments.
5. Direct debit
Direct debit is a type of bank transfer ideal for recurring payments, such as subscriptions. Once the customer authorizes it, you can automatically withdraw funds from their account according to an agreed schedule. This method reduces administrative overhead and late payments.
SEPA Direct Debit has simplified these payments over the years. Still, they could be resource-intensive to set up and manage, depending on your provider.
6. Links and QR codes
Payment links and QR codes let you accept payments without a website. You generate a link or code, share it via email, invoice, or social media, and the customer pays through a hosted checkout page.
These methods are ideal for invoicing, social selling, or service-based businesses that don't operate through a traditional online store. They also eliminate the need for a dedicated POS terminal and enable quick, on-the-spot selling, as customers can scan a QR code with their phone to pay.
Links and QR codes are cost-effective, easy to set up, and require no technical integration. Customers benefit too, as these methods simplify and speed up the payment process.
On the downside, you have less control over the checkout experience. There's a risk of phishing if customers aren't careful about verifying the source.
7. Cryptocurrency
According to the European Central Bank, nearly 10% of adults in the eurozone owned crypto assets in 2024. The percentage has more than doubled since 2022.
While most people still buy crypto for investment purposes, payments are beginning to emerge for niche use cases too. Adoption is likely to increase significantly with the upcoming revisions to the Markets in Crypto-Assets (MiCA) regulation.
Tips for choosing online payment methods for your small business
Offering a good mix of payment methods is ideal. Still, it’s not always viable, especially when you're working with limited resources and technical capacity. Here's how to prioritize:
- Research your customer base and niche: Location, age, and shopping habits all influence payment preferences. For example, younger customers in Europe prefer e-wallets, while older customers may be more accustomed to cards and bank transfers. Additionally, look at what your competitors offer and keep an eye on trends, since preferences shift over time.
- Consider your needs and capabilities: Consider the nature of your business. High-value products might benefit from bank transfer and BNPL, while subscription models call for direct debit. Think about your liquidity needs—how important is consistent cash flow? And be realistic about how much time and effort you can invest in integration and maintenance.
- Plan your budget carefully: Factor in all costs, including transaction fees, monthly fees, setup costs, and potential cash flow delays from BNPL or slower settlement methods. A payment method that looks cheap per transaction can get expensive if it comes with hidden fees or requires costly integrations.
It’s also important to select the right payment providers. Look for strong security, simple pricing, easy integration, and support you can reach quickly when something goes wrong. Since offering multiple payment methods means working with multiple providers, a platform that brings them together under one roof can save you significant time, effort, and money.
Manage your payments effortlessly with Paypercut
Paypercut is an all-in-one payment platform created for small and mid-sized businesses in Central and Eastern Europe. With Paypercut, you can offer various payment methods, including cards, digital wallets, Buy Now, Pay Later, links, QR codes, and subscription billing, and launch them within days.
Paypercut is fully localized and supports local currencies, payment methods, and onboarding requirements. You don’t need to deal with paperwork, contracts, or KYC verification—Paypercut handles them on your behalf. You can offer 12+ currencies, sell to 20+ countries without friction, and control how each payment is charged.
Paypercut’s benefits also include:
- User-friendly integrations: Connect your existing bank account and set up the payment methods you need using the user-friendly API or plugins for Shopify, WooCommerce, and OpenCart.
- Straightforward pricing: Pay only for successful transactions. Scale and expand easily. Cancel anytime. Paypercut doesn’t lock you in with monthly contracts.
- Seamless checkouts: Ensure a secure and smooth checkout experience for your customers with trusted wallets and fast flows. Top it off with your company logo and brand colors.
- Actually helpful support: Get answers and resolve issues quickly with the help of Paypercut’s regional experts.
Get started with Paypercut and let your customers pay the way they prefer.
