Electronic payments give online shoppers speed and convenience and give merchants instant, trackable revenue, but every method also carries costs, fraud and dispute risk, and customer-trust trade-offs. The right mix depends on where your customers are and how they prefer to pay. Below, we compare the six main e-commerce payment types (cards, digital wallets, bank transfers and open banking, buy now pay later, cash on delivery and crypto) with the advantages and disadvantages of each.
Advantages and disadvantages of electronic payment at a glance
Before looking at individual methods, it helps to see what all e-payment systems share.
Common advantages
- Speed and convenience: customers can pay in seconds from any device, at any hour.
- Reach: you can sell to customers in other regions and currencies without a physical presence.
- Automation: payments reconcile with orders, invoices and accounting automatically, instead of being counted by hand.
- Data: every transaction leaves a record that helps with reporting, refunds and fraud checks.
Common disadvantages
- Processing costs: most methods charge per-transaction fees, and the pricing models differ widely between providers and countries.
- Fraud and disputes: online payments attract stolen credentials, account takeovers and chargebacks.
- Technical dependence: outages, declined payments and integration errors can stop sales.
- Trust barriers: in Baymard Institute's research on US online shoppers (page updated September 2025), 19% of those who abandoned a checkout said they didn't trust the site with their credit card information, and 9% said there weren't enough payment methods.
1. Credit and debit cards
Cards remain a core online payment method. Global Payments' 2026 Global Payments Report found that direct card usage accounted for 31% of global online spending in 2025, and many wallet payments are card payments underneath.
Advantages
- Near-universal recognition, especially in North America and Europe.
- Strong consumer protections, including chargebacks, which reassure first-time buyers.
- Credit cards let customers spread the cost using their own credit line.
- Mature authentication tools, such as 3-D Secure, reduce fraud liability.
Disadvantages
- Merchants carry chargeback risk and pay dispute fees when customers contest a charge.
- Typing a card number on mobile is slow and error-prone, which adds checkout friction.
- Handling card data requires PCI DSS compliance, although hosted payment fields shift most of that burden to the provider.
- Declines, from fraud filters to expired cards, lose sales you had already won.
2. Digital wallets
Digital wallets such as Apple Pay, Google Pay, PayPal and regional apps store the customer's payment details and approve payments with a tap, a password or biometrics. They are now the leading online method worldwide: according to the same 2026 report, digital wallets represented 56% of global online spending in 2025.
Advantages
- One-tap checkout on mobile, with no card number to type.
- Tokenization and biometric approval make stolen data less useful to fraudsters.
- Customers who don't want to share card details with an unfamiliar store may still buy through a wallet they trust.
- Some wallets pass the shipping address along, which speeds up checkout further.
Disadvantages
- Popularity varies by country, so the "right" wallet in one market may be unknown in another.
- Some wallet providers can place holds or reserves on merchant funds, which affects cash flow.
- Each additional wallet is another integration, set of rules and dashboard to manage.
3. Bank transfers and open banking (account-to-account)
Account-to-account (A2A) payments move money directly from the customer's bank account to yours, either through a traditional transfer or through an open banking flow in which the customer approves the payment in their banking app. In the euro area, the rules have improved: from 9 October 2025, EU providers must let people send instant euro transfers that arrive in seconds, may not charge more for them than for a standard transfer, and must check free of charge that the recipient's name matches the IBAN.
Advantages
- Often cheaper to accept than cards, because card network fees don't apply.
- No card chargebacks, and the bank's strong authentication lowers fraud.
- Instant schemes give you confirmed funds quickly, which suits high-value orders.
- Well suited to B2B orders and customers who prefer to pay from their bank account.
Disadvantages
- Manual transfers delay shipping until the payment is matched to the order.
- Refunds must be sent back to the customer's account by you, not reversed automatically.
- Buyer protection is weaker than with cards, which can put off first-time customers.
- Open banking coverage and bank support differ from country to country.
4. Buy now, pay later (BNPL)
BNPL providers pay the merchant up front and let the customer repay in installments, often interest-free. It is becoming more regulated: in the UK, the Financial Conduct Authority began regulating deferred payment credit, the most common form of BNPL, on 15 July 2026, which brings affordability checks and complaint rights for borrowers.
Advantages
- Can lift conversion and basket size on higher-priced products.
- The BNPL provider usually takes on the credit and repayment risk.
- Attracts shoppers who avoid credit cards.
Disadvantages
- Merchant fees are typically higher than for cards, so check the provider's own pricing before you enable it.
- Returns and refunds involve a third party, which can confuse customers.
- Rules differ by market and are tightening, so providers' terms may change.
- There is a reputational risk if customers overextend themselves.
5. Cash on delivery (COD)
With COD, the customer pays the courier in cash (or sometimes by card) when the parcel arrives. It remains important in markets where card ownership or online trust is lower.
Advantages
- Removes the trust barrier entirely: customers pay only when they see the goods.
- Reaches customers who have no card or bank account.
- No online fraud or chargebacks.
Disadvantages
- Refused deliveries mean paying for shipping both ways and holding stock that isn't selling.
- Cash takes longer to reach you, via the courier's remittance cycle.
- Couriers often charge a COD handling fee, and cash handling adds reconciliation work.
6. Cryptocurrency and stablecoins
Some merchants accept crypto through payment processors that convert it to local currency at the point of sale. Regulation is maturing too: in the EU, the Markets in Crypto-Assets Regulation (MiCA) has been fully applicable since December 2024, and ESMA says the transitional period for existing providers ran until 1 July 2026 at the latest.
Advantages
- Cross-border payments without card networks.
- No card-style chargebacks, because transactions are final once confirmed.
- Appeals to a niche, often tech-savvy audience.
Disadvantages
- Price volatility, unless you use stablecoins or instant conversion.
- Low mainstream demand, so it rarely replaces other methods.
- Tax, accounting and compliance requirements vary by country and can be complex.
- Refunds and mistakes are hard to reverse.
Comparison table
| Method | Main advantage | Main disadvantage | Best for |
|---|---|---|---|
| Cards | Universal and familiar, with buyer protection | Chargebacks and checkout friction | Almost every store |
| Digital wallets | Fast, secure mobile checkout | Different wallets lead in different markets | Mobile-heavy and international stores |
| Bank transfer / open banking | Lower cost, no card chargebacks | Weaker buyer protection, manual refunds | High-value and B2B orders, euro markets |
| BNPL | Higher conversion on bigger baskets | Higher merchant fees, changing rules | Fashion, electronics, furniture |
| Cash on delivery | Removes the trust barrier | Refused deliveries and slow cash | Markets with low card use or low online trust |
| Crypto | Borderless, final settlement | Volatility and low demand | Niche and tech audiences |
How to choose the right payment mix
- Start with your customers' country. Offer the card brands and the one or two wallets or local methods your target market actually uses.
- Cover mobile first. With wallets leading online spending, a one-tap option is expected on phones.
- Compare total cost, not the headline rate. Include chargebacks, refunds, currency conversion, payout timing and failed deliveries. Check each provider's current pricing page for its fees.
- Balance conversion against risk. BNPL and COD can win sales but add costs; bank transfers cut costs but can slow orders down.
- Keep the checkout short. Three to five well-chosen methods usually beat a long list.
Payments in CIQRA
CIQRA stores can offer Stripe, PayPal, iyzico, PayTR, Param, Moka and bank card gateways, plus bank transfer and cash on delivery, so you can combine global and local methods in one checkout.
FAQ
What are the main disadvantages of e-payment systems?
Transaction fees, fraud and chargeback risk, dependence on technology and connectivity, and the fact that some customers don't trust unfamiliar sites with their payment details.
What is the most popular online payment method?
Globally, digital wallets: they represented 56% of online spending in 2025, ahead of direct card use at 31% (Global Payments, 2026 Global Payments Report). The leading method still varies by country.
Is bank transfer safer than a card payment for merchants?
For merchants, usually yes: there are no card chargebacks and the customer's bank authenticates the payment. For buyers, cards generally offer stronger dispute rights.
Should a small online store offer cash on delivery?
Only if your market expects it. COD can open up new customers, but plan for refused deliveries and slower cash flow.
Sources
- Global Payments, "Gen Z Driving the Shift from Cards to Digital Wallets, New Research from Global Payments Suggests" (Global Payments Report 2026), March 2026
- Baymard Institute, "Cart Abandonment Rate Statistics", updated September 2025
- European Commission, "New EU rules make instant euro payments faster and safer", October 2025
- Financial Conduct Authority, "Regulating Buy Now Pay Later (BNPL)", 2026
- ESMA, "Markets in Crypto-Assets Regulation (MiCA)", 2026