Does your small-business e-commerce site need to accept a full range of credit cards? Or can it get by with simply a payment system such as PayPal?

Many will tell you the more options, the merrier. After all, conversion rates for sites that offer more than four payment options average 72 percent, more than 10 percentage points higher than sites that offer only one payment method, according to a 2004 survey by CyberSource.

In spite of this, experts say more payment options may not be the smartest move. Too many payment options can be confusing—and end up driving customers away, they say.

Here are five questions to ask before deciding how many and what type of payment options you should offer your customers.

1. Is your e-commerce site a key contributor to your business? If the answer is "yes," you'll want to consider offering as many options as is practical. "Don't limit your market," says Jill Exler, founder of the online bookstore Jexbo.com. "If you use a payment service that allows a broader range of options, you will reach more customers." That means at a minimum, you're allowing users to pay with PayPal, but that you're also likely adding a credit card payment option.

(Don't have an e-commerce site yet? Check out the low-cost Store Manager feature  at Office Live Small Business. Store Manager allows users to pay with PayPal, to use credit cards via PayPal integration, and/or to pay by traditional methods such as check, cash, cashier's check, or money order.)

2. Is your checkout too cluttered? According to the CyberSource survey, shopping cart abandonment rates declined for every additional payment option. Yet the survey didn't address whether the payment options were presented in a user-friendly way. Time and again, e-commerce experts warn of cluttered checkouts. Poor design of these pages can drive customers away, they say. Examine your checkout area and have a look at your Web statistics. They should tell you if your customers are suffering from payment option overload.

3. Are you a B2B or a B2C? If you operate a business-to-business company, as opposed to a business-to-consumer company, you might not have to offer a credit card payment option at all. "Many B2Bs want to pay by check and expect a discount—due in full in 30 days, or a 2 percent discount if paid within 10 days," says Nancy Kirk, who runs PRM Associates, an Omaha, Neb.-based communications firm that works with small businesses. "Others want [to use] certain credit cards because they collect frequent-flier miles to go to trade shows."

4. Are you running a specialty business that needs to make certain allowances for customers? If you are, says Henry Helgeson, chief executive of Boston-based payment processor Merchant Warehouse, your customers might actually prefer an alternate payment system. For example, businesses that specialize in handling eBay merchandise need to offer alternatives before anything else. "Many consumers expect to be able to use alternative payments and often view businesses that accept these payments as more credible than those that don't," he says.

5. Do your customers live in a place with rules or regulations that affect traditional payment systems?  If you're doing any international business, you need to be aware of local laws regarding data and privacy. "Payment card industry regulations are very specific and they change periodically," says Todd Whiton, chief executive of Capital Payments, a Melville, N.Y., payment services company for businesses. If you decide to go the credit-card route, he recommends working with a company that understands the regulations and can help you comply with them.

Regardless of what you decide—to stick with PayPal or add multiple options—implementation is the key.

"Given the large mix of Web browsers and operating systems in use, it is challenging to ensure a quality Web experience for all customers," says Patrick Lightbody, quality assurance product manager for Lexington, Mass., consultancy Gomez, Inc., which specializes in Web site monitoring.

He suggests a thorough testing of your site from a visual, functional, and performance (a.k.a. how fast pages load) perspective.  This will ensure that any usability issues come to light before they impact the customer experience—and ultimately your revenues.