I'm checking an update before release and as I was checking everything out, I realized the English version of our product uses "Payment mode" as caption for payment methods. I wasn't exactly sure if it was an accepted term or not. I know mode of payment exists, but I've never heard of "payment mode".
"Payment mode" would be fine. It would get the message across quite unambiguously. However, I think the more common phrase is "payment method," just so you are aware. If I were in your position (I too am a software developer), I would probably not bother the project manager with this issue, since it would probably set you back to change it.