The protection of your customer's payment information is extremely important. Not only would a breach of security cause damage to your customer's credit and financial accounts, but the publicity of such a breach could be devastating to your business.

Merchant account providers will require that your store meet stringent guidelines for PCI compliance, a set of security requirements called Payment Card Industry Data Security Standard (PCI DSS). Your ability to be PCI compliant is based on the integrity of your hosting environment and by which methods you allow customers to enter credit card information on your site.

Magento 2 no longer offers a "stored credit card" payment method. It is highly unlikely that you could — or would want to — provide a server configuration secure enough to meet PCI DSS requirements for storing credit card information. You probably don't want the liability exposure, either.

You can, however, provide SSL encryption that could satisfy PCI compliance as long as the credit card information is encrypted before being sent to your server, and then from your server to the credit card processor. As long as you're not storing the customer's credit card information on your server, you can meet PCI compliance as long as your hosting provider can assure compliance for server and database security.

Therefore, you should decide whether to provide onsite or offsite credit card payments. In other words, do you want to take payment information within your Magento checkout page or redirect the user to a payment service, such as PayPal, to complete their transaction?

There are pros and cons of each method. Onsite transactions may be perceived as less secure and you do have to prove PCI compliance to your merchant account provider on an ongoing basis. However, onsite transactions mean that the customer can complete their transaction without leaving your website. This helps to preserve your brand experience for your customers.

Fortunately, Magento is versatile enough to allow you to provide both options to your customers. Personally, we feel that offering multiple payment methods means you're more likely to complete a sale, while also showing your customers that you want to provide the most convenience in purchasing.

Let's now review the various payment methods offered by default in Magento 2.

The determination of which payment system to utilize in your Magento store is driven by a comparison of pros and cons (isn't everything in life?). In terms of credit card sales, there are two basic classifications of payment systems: off-site and on-site.

Today, PayPal remains one of the most popular payment systems in the world because it does allow for global purchases. You can sell to buyers in other countries, as long as they have a PayPal account, knowing that you will receive payment. Most regular merchant accounts, such as those used by bricks and mortar retailers, restrict sales to only buyers with cards issued by US banks.

In the past, the downside to using PayPal was that buyers would have to sign up for PayPal if you, the merchant, offered it as a payment system. That changed some years ago: today your buyers don't have to sign up for PayPal. They can purchase using a credit card without enrolling.

PayPal recently acquired Braintree, a payment services company that adds additional services to merchants. While many of their offerings appear to overlap PayPal's, Braintree brings additional features to the marketplace such as Bitcoin, Venmo, Android Pay, and Apple Pay payment methods, recurring billing, and fraud protection. Like PayPal Payments, Braintree charges 2.9% + $0.30/transaction.

If you have customers for whom you will accept payment by check and/or money order, you can enable this payment method. Be sure to enter all the information fields, especially Make Check Payable to and Send Check to. You will most likely want to keep the New Order Status as Pending, which means the order is not ready for fulfillment until you receive payment and update the order as Paid.

As with any payment method, be sure to edit the Title of the method to reflect how you wish to communicate it to your customers. If you only wish to accept money orders, for instance, you might change Title to Money Orders (sorry, no checks).

As with check/money order, you can allow customers to wire money to your account by providing information to your customers who choose this method.

Likewise, you can offer COD payments. We still see this method being made available on wholesale shipments, but very rarely on B2C (business-to-consumer) sales. COD shipments usually cost more, so you will need to accommodate this added fee in your pricing or shipping methods. At present, there is no ability to add a COD fee using this payment method panel.

If your customer, by use of discounts or credits, or selecting free items, owes nothing at the checkout, enabling this method will cause Magento to hide payment methods during checkout. The content in the Title field will be displayed in these cases.

In B2B (business-to-business) sales, it's quite common to accept purchase orders (PO's) for customers with approved credit. If you enable this payment method, an additional field is presented to customers for entering their PO number when ordering.

Authorize.net — perhaps the largest payment gateway provider in the USA — provides an integrated payment capture mechanism that gives your customers the convenience of entering credit/debit card information on your site, but the actual form submission bypasses your server and goes directly to Authorize.net. This mechanism, as with PayPal Payments Advanced, lessens your responsibility for PCI compliance as the data is communicated directly between your customer and Authorize.net instead of passing through the Magento programming.