Checkout Payment: What It Means and How to Simplify the Process

Your customer has browsed your products, added items to their cart, and made it all the way to checkout. Then they leave.

Checkout payment is the transaction process at the final stage of a purchase, where customers confirm orders and submit payment. According to Baymard Institute research, roughly 70% of online shopping carts are abandoned globally, with many lost sales happening right at this critical payment moment.

This guide explains how checkout payment works, what causes friction, and how to choose payment solutions that fit how you actually sell.

How Checkout Payment Processing Works

Every card payment follows a specific path from the customer's tap or swipe to the funds landing in your account. Knowing this flow helps you identify where delays or failures might occur.

1. Customer initiates payment: They enter card details, tap their phone, or use a saved payment method at checkout.
2. Gateway encrypts data: Payment information is secured before transmission to protect sensitive card details.
3. Authorization request: The processor contacts the card network (Visa, Mastercard, etc.), which forwards the request to the customer's issuing bank.
4. Bank verification: The issuing bank checks available funds, potential fraud, and authentication in real-time before approving or declining.
5. Confirmation sent: Approval travels back through the chain, and the transaction completes on screen.
6. Settlement: Funds transfer to your merchant account. Timing varies: some solutions offer instant access, while traditional processors take one to three business days.

According to Stripe's research on payment processing, processing digital payments costs 57% less than handling non-digital methods like cash or checks. For businesses looking to accept credit card payments efficiently, knowing this backend flow helps you choose processors that minimize delays and costs.

Checkout Payment Methods to Offer Customers

Customers expect choices at checkout. Limited payment options drive roughly 13% of cart abandonments, according to Baymard's research. Offering multiple methods removes friction and accommodates different preferences.

Card Payments

Credit and debit cards remain the most common checkout payment method worldwide. Accepting Visa, Mastercard, and American Express covers the majority of card-paying customers. Debit cards often carry lower processing fees than credit cards, making them attractive for budget-conscious merchants. Online payments through cards typically involve tokenization, where sensitive card numbers are replaced with secure tokens during checkout.

Digital Wallets

Apple Pay, Google Pay, and Samsung Pay have grown quickly, especially among younger customers. Digital wallets store card information securely and enable faster checkout with biometric authentication. Businesses that accept digital wallets often see higher conversion rates because customers can pay with a tap instead of typing card numbers.

Contactless and Tap to Pay

NFC-enabled cards and phones allow customers to pay by tapping at a terminal or smartphone. This method works for both in-person and mobile checkout scenarios. JIM accepts all contactless methods directly on iPhone, making it simple to accept contactless payments without additional hardware.

Alternative Methods

PayPal remains a trusted global payment option, especially for e-commerce customers who prefer not to enter card details directly. Buy Now Pay Later services like Klarna let customers split purchases into installments, which can boost average order values. Bank transfers and ACH work well for larger transactions with lower processing fees. Regional and local payment options like PayNow, iDEAL, or PIX serve specific geographic markets. Recurring payments through subscription billing platforms help businesses with membership models collect automatically. Choosing which alternatives to offer depends on your customer base, average order value, and whether you sell one-time or subscription products.

Why Checkout Matters: Cart Abandonment and Lost Revenue

A clunky checkout doesn't just frustrate customers; it directly costs you money. The numbers tell a clear story about where sales fall apart.

Research from SellersCommerce found that 48% of shoppers abandon carts when extra fees appear at checkout. Another 22% leave because the checkout process is too long or complicated. Strong checkout experience optimization with fraud detection, fraud prevention, and real-time payment confirmation builds customer trust and reduces chargeback disputes. Mobile shoppers abandon at even higher rates, with 75.5% of mobile carts left behind compared to 69% on desktop.

The average checkout flow has five or more steps. Studies suggest the optimal number is three. Each additional form field or page load creates another opportunity for customers to reconsider or get distracted.

For businesses selling in person, checkout friction looks different but carries similar costs. Long lines, payment terminal failures, or limited payment options all push customers away. Knowing your in-person payment options helps you minimize these friction points.

Simplifying Checkout for In-Person and Mobile Sales

Not all checkout happens online. Food trucks, market vendors, service providers, and mobile businesses need payment solutions that work wherever they sell. Traditional point-of-sale systems require hardware investments, long-term contracts, and often multi-day settlement delays.

Smartphone-based checkout offers an alternative. Your iPhone can become your entire payment system, accepting cards and digital wallets without separate terminals or card readers.

Consider JIM for mobile and in-person checkout. The app transforms your iPhone into a contactless payment terminal using Tap to Pay technology. Customers can pay with credit cards, debit cards, Apple Pay, or Google Pay by simply tapping your phone.

JIM charges a flat 1.99% per transaction with no monthly fees and no hidden costs. Funds appear instantly on your JIM Visa® Prepaid Card after each sale. For businesses that need to accept payments on the go, this approach eliminates the typical barriers of traditional mobile POS systems.

You can explore how the fee structure compares to other options on JIM's pricing page.

Start Accepting Payments Today

Checkout payment represents the critical moment where customer intent converts to actual revenue. Friction at this stage, whether from complicated forms, limited payment methods, or slow terminals, directly costs you sales.

The right solution depends on how you sell. Online businesses need streamlined payment pages and diverse payment options. In-person and mobile businesses need flexibility without hardware complexity.

For those selling face-to-face, JIM offers a way to simplify checkout entirely. Your iPhone handles contactless payments, you keep more of each sale with flat pricing, and you access your money immediately. No terminals, no waiting, no surprises.

Ready to streamline your in-person checkout? Explore JIM's Tap to Pay and start accepting payments from your phone.