What are all of the different payment methods?

The Norman Knight Card Machine

What are all of the different payment methods?

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These days, the world really is your oyster when it comes to paying for anything and everything. But, with so much choice, your head might be getting in a spin when it comes to what’s what, so we’ve taken the hassle out of the mix and put together a guide to the top nine payment methods on offer.

Debit card

There are three main types of debit cards:

  1. Visa
  2. Mastercard
  3. Maestro

And when people opt to pay with one of these, the money they spend gets deducted straight from their bank balance.

All three varieties of debit card function in the same way: the customer pays with their card through a card machine (via chip & PIN, contactless, over the phone) or online and then the money’s withdrawn directly from their account - usually on the same day but in some cases, it can take 48-72 hours.

Debit cards can be a useful alternative to carrying cash, but research shows people typically spend more on impulse with plastic, as they’re less restricted.

Credit card

Credit cards are used in much the same way as a debit card but the key difference is customers are paying with credit i.e. money they’ll pay back at a later date.

When someone takes out a credit card they’ll be given a credit limit - how much they’re allowed to spend - and when they use it they’re agreeing to pay back the balance plus interest. The three most common credit card issuers are:

  1. Visa
  2. Mastercard
  3. American Express

With a credit card people can pay online, using chip & PIN, contactless or over the phone. Credit cards can be useful for splitting the cost of higher value purchases but come with the risk of people spending money they don’t have and might struggle to repay.

Pre-paid card

Pre-paid cards are an alternative to carrying cash. They can be used in a similar way to debit and credit cards but the person doesn’t need an account to have one. Instead, they’re loaded up with cash as and when needed - much like a pay-as-you-go mobile phone.

Pre-paid cards can be used to pay online, using chip & PIN or contactless, so they carry the flexibility of other plastic options without the risk of running up debts. However, there will be associated fees for the user.


Contactless payments are on the up and they’re popular because of how quick and easy they are to complete. Customers simply tap their card or phone on the card machine and bob’s your uncle, they’ve paid (using near field technology).

Contactless payments can be made with a credit, debt or prepaid card, or by using a mobile phone. The downside to this method is the concerns over how easy it would be for a thief to spend money using someone else’s card, and for this reason, contactless card transactions are limited to £30.

By phone

There are two ways people can pay using their phone.

Apple & Android Pay

If they pop their credit or debit card details into their phone’s ‘wallet’ they can start paying for purchases online or face-to-face in just one click.

With this method, consumers aren’t limited to the £30 contactless cap because there are extra security features involved - with Apple, a finger-print is needed and with Android, a password. The technology works using Radio Frequency Identification and Near Field Technology.

Phone payments

The second way people can pay using their phone is by giving their card details out while on the line, which, for you, is a great way to accept payments from afar.

This works using a virtual terminal - they give their details and you pop them into the terminal on your end. Virtual terminals are equipped with the latest security and can be used with all major credit and debit cards.


Up until last year cash was still the most frequently used payment method and it’s most commonly used for everyday lower-value purchases - like that chocolate bar from the corner shop or a train ticket. It’s quick to use and you get your money there and then, so you know exactly where you’re up to.

From your customer’s perspective, one of the pros of cash is it limits their spending somewhat because they’re less likely to splurge when they’ve got a finite amount of cash in their pocket. However, when it comes to getting cash it can be slightly less convenient as they’ve got to find an ATM (some of which charge), ask for cash-back or head to the bank.


Cheques are becoming a dying breed and their prevalence’s dropping year on year. They’re essentially a paper voucher linked to peoples’ current account and are typically used to pay bills or tradespeople.

Using them is pretty straightforward and free of charge, but it’s up to the person writing the cheque to ensure there’s enough money in their account to cover the cost, so you should never accept a cheque from someone you don’t trust.

Online banking

Online banking or internet banking can be used to make all sorts of payments. The user will need to sign up with their bank before they can get started but once they’re up and running, it can be used to transfer money to anyone they want, directly from their bank account. 

With online banking, direct debits, standing orders or one-off payments to friends, family or businesses can be set-up. 

By email

A simple and straightforward way for a customer to pay for goods online is via a link sent in an email. The person selling the goods (i.e. you) creates a custom link, sends it to the customer and once it’s opened, they’re taken to a secure payment page where they can complete the transaction without the need for any interaction.

Pay by link options accept all major credit and debit cards and can take the hassle out of paying for goods or invoices - just make sure your emails look legit, otherwise, people might be wary about handing over their details. 

If you want help accepting different payment methods we’ve got you covered. From contactless, mobile and online to phone payments and ways to pay by link, get in touch with our team of experts today on 0808 274 2017 to find out how we can help.

Get your FREE quote today.

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