How to Choose Payment Methods for an Online Shop
Portuguese e-commerce is at a turning point, with almost half the population shopping online and increasingly sophisticated expectations regarding the payment methods available. Choosing the right payment methods can make or break an online shop, directly influencing conversion rates and customer satisfaction.
In a market where Portugal shares the highest shopping cart abandonment rate in Europe – 10.41% – with Greece, Croatia, Italy and Serbia, offering the payment methods preferred by consumers is not only a competitive advantage but a business necessity.
An Overview of E-commerce in Portugal
Growth in Online Shopping
The Portuguese digital market is currently experiencing a period of remarkable growth. In 2024, 48.91% of the resident population in Portugal aged 16 to 74 made purchases via the Internet in the three months prior to the survey, representing an increase of 5.0 percentage points compared with the previous year [1]. When considering a longer period, 59.31% of the population had made at least one online transaction in the previous twelve months [1].
The number of online shoppers exceeded the 5.5 million mark for the first time at the end of 2024, representing around 64.1% of the Portuguese population [2]. This growth translated into an increase of more than 200,000 new online shoppers in a single year, demonstrating the accelerating uptake of e-commerce.
It is estimated that online sales in Portugal will grow by around 14.61% in 2024 [3], highlighting the continued potential for expansion in this channel. However, e-commerce penetration levels in Portugal are still relatively low (8%) when compared with international best practice (24%) [3], which suggests significant potential for future growth.
Consumer Behaviour in Portugal
Portuguese consumers’ online shopping habits have distinctive characteristics that retailers need to understand. The mobile phone has established itself as the preferred device, accounting for 57.61% of transactions carried out via this device [4], reflecting the critical importance of mobile optimisation.
Among the most frequently ordered physical products are clothing and footwear (73.11% of the population who shopped online) and home-delivered meals (39.61%) [1]. Portuguese consumers also demonstrate strong price sensitivity, being particularly attracted to special offers and free delivery.
The difference between the final price and the expected price is the main reason for cart abandonment, accounting for 63.71% of cases in Portugal [3]. This statistic highlights the importance of cost transparency right from the start of the purchasing process.
The Importance of Payment Methods
The availability of suitable payment methods is a critical factor in the success of Portuguese e-commerce. 27% of shoppers abandon their purchases because their preferred payment methods are not available [5], highlighting the direct impact of this choice on conversion rates.
The digital payments landscape in Portugal is characterised by a strong preference for local solutions that offer security and familiarity. This situation contrasts with other European markets, where credit cards predominate, requiring a specific approach for the domestic market.
Most Common Payment Methods
ATM reference
Multibanco remains the most common payment method for online shopping in Portugal [6], retaining its leading position despite the growth of digital alternatives. This system, which has been in place since 1989, allows customers to pay for their purchases without disclosing personal or banking details to the retailer.
The process is simple: the online shop automatically generates a payment reference and amount. Customers can then make the payment via ATMs, online banking or mobile apps. The fact that the Portuguese are familiar with this system, which they use daily to pay for various services, contributes significantly to its popularity and trustworthiness.
The advantages include perceived security, the fact that no sensitive data is shared, and the option of deferred payment. The costs to the merchant range from €0.25 to €0.50 per transaction, which is significantly lower than the percentage-based fees charged by other methods.
MB WAY
MB WAY is the preferred payment method among Portuguese consumers, with 27.51% of e-commerce users citing it as their first choice [6]. In some online shops, MB WAY already accounts for 50% of purchases [7], demonstrating its growing importance.
MB WAY was ranked as the second most widely used digital payment method in Europe [8], alongside other local solutions such as Blik (Poland) and Twint (Switzerland). The app enables instant payments using only a mobile phone number, offering convenience and security through strong authentication with a personal PIN.
For online payments, customers select the MB WAY method, enter their mobile number and confirm the payment in the app. This simplicity, combined with the fact that there is no need to share bank details, makes it particularly appealing for mobile purchases.
Credit and Debit Cards
Although they are not the first choice, cards remain a significant part of the Portuguese payments ecosystem. 80% of Portuguese consumers use credit or debit cards as a payment option [9], particularly for higher-value purchases or recurring subscriptions.
The implementation of strong authentication (3D Secure) has become mandatory, enhancing security but potentially adding friction to the process. Merchant fees typically range from 1.51% to 2.91% of the transaction value, representing a higher cost than local solutions.
PayPal
PayPal has established a strong foothold in the Portuguese market, offering buyer protection and facilitating international purchases. The platform operates in 203 markets and supports payments in multiple currencies, making it particularly useful for shops that sell across borders.
The main advantage is the sense of security, as the user only shares their PayPal email address. Fees amount to 2.41% + €0.35 per transaction for domestic sales, with variations for international transactions.
Bank Transfer
Bank transfers remain a popular option, particularly for B2B or high-value purchases. With the introduction of SEPA instant transfers, funds can be credited within seconds, 24/7, thereby eliminating one of the main drawbacks of this method.
However, the manual reconciliation process can pose administrative challenges for companies, particularly when dealing with large volumes.
Alternative Methods
E-cards (MB NET)
MB NET, now integrated into MB WAY, allows you to create virtual cards for online purchases, offering an extra layer of security. There are three options:
- One-off Purchase Card: Valid for up to 2 months; cancelled after the first transaction
- Multi-purchase card: For regular purchases from the same retailer
- Recurring Payment Card: Ideal for subscriptions
This free service is compatible with all major card brands and allows users to set spending limits, giving them greater control over their online spending.
Digital wallets (Apple Pay, Google Pay)
441% of Portuguese smartphone or smartwatch users use them regularly to make payments [10], outstripping countries such as Spain (241%) and the United Kingdom (291%). The uptake of these solutions has grown rapidly, particularly among younger consumers.
Digital wallets offer a streamlined checkout process via biometric authentication, eliminating the need to enter card details. Data tokenisation provides additional security, as the actual card number is never shared with the merchant.
Payments in Cryptocurrencies
Although they are still a niche market, cryptocurrency payments are gradually gaining acceptance. Transactions are processed without the involvement of banks, thereby eliminating traditional fees. However, volatility and regulatory issues remain significant challenges to widespread adoption.
Cash on Delivery
Cash on delivery, offered by couriers such as CTT, allows customers to pay only upon delivery. This method can reduce shopping cart abandonment but poses risks for the seller, with fees ranging from 21% to 71% of the order value.
How to Choose the Right Methods for Your Shop
Get to know your target audience
Analysing the demographic profile of customers is essential. The 35–44 and 45–54 age groups account for the largest share of online shoppers in Portugal. Different age groups demonstrate distinct preferences: younger people favour fast digital solutions such as MB WAY, whilst older consumers may prefer traditional methods.
Consider Safety and Trust
Security must be an absolute priority. 17% of shopping cart abandonment cases are due to a lack of confidence in the website’s security. Implementing SSL certificates, choosing reliable payment processors and ensuring compliance with PCI-DSS standards are minimum requirements.
Compare Costs and Transaction Fees
Each method has a different cost structure:
- ATM: €0.25 – €0.50 per transaction
- MB WAY: Fees similar to those at Multibanco
- PayPal: 2.4% + €0.35 (domestic sales)
- Cards: 1.5% – 2.9% of the value
- Cash on delivery: 2% – 7% of the value
You should also take into account indirect costs such as chargeback fees and currency conversion charges for international sales.
Compatibility with e-commerce platforms
Check that the chosen methods are compatible with your platform. WooCommerce, Shopify and PrestaShop offer varying levels of native integration. Some methods may require additional development, which could affect costs and implementation times.
How to Set Up Payment Methods in Your Online Shop
Integration with Payment Gateways
The implementation begins with choosing a gateway that connects your shop to the payment processors. For the Portuguese market, IFTHENPAY, Eupago and SIBS are well-established options offering specific support for local payment methods.
Examples using WooCommerce and Shopify
WooCommerce:
- Install the gateway plugin of your choice
- Configure using the API credentials provided
- Enable the desired payment methods
- Set up callbacks for automatic confirmation
Shopify:
- Go to payment settings
- Add a gateway via apps or manual integration
- Set up webhooks for status updates
- Testing in a staging environment
Best Practices at Checkout
- Simplicity: Minimise the number of mandatory fields and offer guest checkout
- Transparency: Be transparent about all costs from the outset to avoid any surprises [3]
- Mobile-first: With 57.61% of transactions taking place on mobile devices [4], optimisation is critical
- Extensive testing: Check all scenarios before launch
Conclusion
Choosing the right payment methods is a key factor in the success of Portuguese e-commerce. With Portugal recording one of the highest shopping cart abandonment rates in Europe (10.41%) [5], offering the options preferred by consumers is essential.
The Portuguese market is characterised by a strong preference for local payment methods such as Multibanco and MB WAY, which offer security without the need to share sensitive data. At the same time, the growing adoption of digital wallets and the continued availability of traditional options such as cards and PayPal ensure that different consumer profiles are catered for.
Success lies in striking a balance between offering a variety of options and making it easy to choose, ideally providing between three and five payment methods that cater to the preferences of the majority of customers. Cost transparency, robust security and an optimised checkout process round off the formula for maximising conversions.
With Portuguese e-commerce continuing to expand and still offering significant potential for growth, investing in the right payments strategy is not merely a technical decision, but a strategic investment in the future of the business.
References
[1] ANACOM – 49% of the population in Portugal made online purchases in 2024. Available at: https://www.anacom.pt/render.jsp?contentId=1802562
[2] 5.5 million Portuguese people already shop online – APDC. Available at: https://www.apdc.pt/noticias/atualidade-nacional/55-milhoes-de-portugueses-ja-compram-online
[3] The Iberian e-commerce landscape in 2024 – CTT. Available at: https://www.ctt.pt/blog/o-panorama-iberico-do-e-commerce-em-2024
[4] INE website – Survey on the Use of Information and Communication Technologies by Households 2024
[5] The shopping cart abandonment rate in Portugal rose by 3.31 percentage points between 2020 and 2023 – ecommercenews PT. Available at: https://ecommercenews.pt/taxa-de-abandono-do-carrinho-em-portugal-aumentou-33-entre-2020-e-2023/
[6] MBWay is the preferred payment method for online shopping in Portugal – Dinheiro Vivo. Available at: https://www.dinheirovivo.pt/economia/mbway-e-a-forma-de-pagamento-preferida-no-comercio-online-em-portugal-14994079.html
[7] Customers | Choose your customers’ preferred payment methods – SIBS. Available at: https://www.pay.sibs.com/clientes/
[8] MB WAY was ranked as the second most widely used digital payment method in Europe. Available at: https://www.mbway.pt/o-mb-way-foi-considerado-o-2o-meio-de-pagamento-digital-mais-usado-na-europa/
[9] MBWay is the second most popular payment method among the Portuguese – IT Insight. Available at: https://www.itinsight.pt/news/digital/mbway-e-o-segundo-metodo-de-pagamento-preferido-dos-portugueses
[10] MBWay provides a major boost: digital payments take centre stage in Portugal – Executive Digest. Available at: https://executivedigest.sapo.pt/noticias/mbway-da-grande-impulso-pagamentos-digitais-ganham-destaque-em-portugal/
[11] What are the main causes of shopping cart abandonment and how can they be reduced? – Magalu. Available at: https://universo.magalu.com/blog/artigo/abandono-de-carrinho
Frequently Asked Questions
ATMs remain the most widely used method, followed by MB WAY, which is now the preferred option, accounting for 27.51% of preferences MBWay is the fastest-growing online payment method in Portugal - Distribuição Hoje. PayPal and credit/debit cards round off the top four most common payment methods.
Although it is not a legal requirement, it is strongly recommended as it is the most widely used method. Failure to do so could result in a significant loss of sales.
Costs vary: Multibanco/MB WAY (€0.25–€0.50 per transaction), PayPal (2.41% + €0.35), Cards (1.51%–2.91%), Cash on delivery (21–71% of the amount).
Yes, it uses strong authentication via the app with a personal PIN, does not share bank details, and all transactions require active user confirmation.
Ideally, you should have between 3 and 5 options. Essential: Multibanco, MB WAY and credit/debit cards. Add PayPal for international sales.
Show total costs from the outset (63.71% of third-term students drop out due to the cost difference) The shopping cart abandonment rate in Portugal rose by 3.31 percentage points between 2020 and 2023 - ecommercenews PT, offer preferred payment methods, allow checkout without registration, and ensure visible security.
With 57.61% of transactions made via mobile phone APDC – 5.5 million Portuguese people already shop online and 44% using smartphones for payments MB WAY - Mobile Payment, having mobile-optimised methods is essential.