At checkout, the payment method is the instrument a customer picks to move money to the business: a card, a bank transfer, a wallet, a direct debit, cash, or a deferred plan. That is the whole payment method definition — the instrument, not the provider behind it. The narrower payment method meaning used in scheme contracts names a specific product, and each one carries a different cost, settlement time and chance of being reversed later.
Types of payment methods
Cards — credit card, debit card and prepaid card — approve in a second and settle in days, with dispute rights that last months.
Bank rails move money between accounts: direct debit for recurring collection, instant credit transfers for one-off payments, and open banking underneath most modern account-to-account transfer products. Wallets are a layer on top of the first two rather than a rail of their own. Deferred products, including buy now pay later and installments, pay the merchant up front and keep the credit risk. Cash sits outside all of it.
The number that decides, and the one that misleads
Teams asking what is payment method cost per transaction are comparing the figure everyone quotes and the wrong one to optimize against. A method that is cheaper per sale but converts worse loses money on every session it touches. The comparison that counts is revenue per session after fees, measured on live traffic rather than on a rate card.
Reversibility differs more than price does
A card sale can be pulled back months after delivery. A SEPA direct debit can be recalled by the payer for eight weeks with no reason given. A completed credit transfer is final in practice. For a business with thin margins and a delivery lag, that spread matters far more than a few basis points of fee difference.
Local expectation beats global logic
Preference is national, not rational. Dutch shoppers expect iDEAL, Poles BLIK, Germans invoice and direct debit, Brazilians Pix. A cards-only checkout in those markets loses baskets that no amount of design work recovers, which makes entering a country partly an alternative payment method decision — that page covers what accepting one actually involves.
When to add one, and when to remove one
Every method carries a fixed cost after launch: integration, reconciliation, refund handling, support training and permanent screen space. A workable rule is to add a method when it can plausibly reach a meaningful share of a market's volume, and to retire any that stays far below that after a fair trial. Three or four well-chosen options at checkout outperform a long list, especially on mobile, where each extra logo pushes the pay button further down the screen.