Essential Payment Methods for Online Shops: Choosing the Right Options for Your E-commerce Success
There are a large number of different payment methods in e-commerce. They can be integrated very quickly by online retailers. It is worth considering everything properly first and only then making a decision. The choice of payment systems has a very strong influence on the successful completion of a purchase. It is not uncommon for purchases to be abandoned. And the reason is quite simple. The payment method requested by the buyer is missing from the online store. That's why you shouldn't focus on just one or two options.
Most online retailers tend to use the best-known payment options and use these in their store. You will receive a detailed explanation of the most frequently used digital transactions and learn about their advantages and disadvantages.
Contradictions: Which payment methods does your online store offer and which do shoppers prefer?
There are often misunderstandings between online retailers and buyers. The first and most important problem for online retailers is that they have implemented the “wrong” payment systems in their stores. Customers are then reluctant to make purchases. If you want to win new customers, you have to convince them of the best conditions. This leads to an increase in sales because the customer's wishes are fully satisfied. It is very important to offer different payment methods in the online store. The business is growing fast and will soon stand out from the competition.
Among the digital transactions, purchase on account stands out. This method attracts many customers because it is safe and advantageous. The amount can only be paid after the goods have been received. It is convenient because you can check the goods yourself.
Recommended payment methods for your online shop
In our article, we would like to describe the most popular payment methods that make online shopping easier, more flexible and more convenient. If they are used in the online store, there will definitely be fewer abandoned orders. We focus on 10 payment methods that should be available in every online store. This ensures the highest quality of service for customers. As an online retailer, you benefit from higher sales, because the store becomes popular and customers buy from it more and more often. Let's take a closer look at the top 10 payment methods for online stores.
Purchase on account
It is fair to say that purchasing on account is one of the most popular online store payment methods. That's why this option should be available in every online store. It is usually preferred by customers, but not by online retailers. Here are all the pros and cons of this payment method:
| Advantages | Disadvantages |
| You do not have to enter any sensitive account details. | Payment defaults and delays are possible. |
| There are no direct fees. | Due to the low profit margins in online stores, this payment method encourages the increase in fees. This makes it unprofitable. |
| You can reduce the number of abandoned purchases. | Recovering the goods is very time-consuming. |
| The customer can check the goods himself before payment. | Fraud is possible. |
| The goods are dispatched immediately. The waiting times are shortened. | The store operators bear the entire transaction risk. |
PayPal is one of the most popular payment methods in e-commerce
As this payment method is very easy to process, it is very popular with buyers and online retailers. The bank details are disclosed and the operator of the online store receives the payment before delivery.
| Advantages | Disadvantages |
| Payments are fast, simple and secure. | Online retailers have hardly any options for data collection. |
| Cancellations are not possible. | The online retailers pay the fees. |
| Buyer protection resolves disputes between merchants and buyers if the goods ordered do not arrive or are damaged. | PayPal accounts often suffer from attacks by hackers. |
Direct debit
Direct debit payments are very popular in Germany. Online merchants receive the account details and the customer's consent to debit the invoice amount. If you create an online store, you must always offer this payment option.
| Advantages | Disadvantages |
| The online payment system is simple for the buyer and does not require punctual payment. | Payment defaults due to insufficient funds or chargebacks are possible. The seller is then responsible for the chargeback. |
| Online merchants can use any business account. This digital transaction is not only inexpensive, but also secure and uncomplicated. | Since data theft or identity theft can occur, certain security measures must be introduced. |
| When paying by direct debit, customer data is transmitted to the online merchant. | Additional costs are incurred due to credit checks by external service providers. |
Credit card payment
This is one of the most popular payment methods in the B2B sector or when traveling. Customers often use this option because the fees are not so high (2-4%) and may be even lower due to new EU directives. It is necessary to offer this payment method in the online shop. Then it will be possible to remain successful for a long time and gain a significant market share.
| Advantages | Disadvantages |
| Payments are processed quickly and effortlessly. | Credit card fraud is not uncommon. |
| The customer can reclaim the payment. | If the chargeback is unjustified, it is not possible. |
| Payments can be made at the international level. | The security measures are necessary because of the theft of data and identity. |
Pay by instant bank transfer
With Sofortüberweisung, an external service provider - Sofort GmbH - is involved. Buyers are then redirected to the SOFORT website. You should enter your bank details there for authentication. The bank transfer is then made from the customer's bank account.
| Advantages | Disadvantages |
| Thanks to the immediate confirmation of payment, fast shipping is possible. | Buyers are not always willing to disclose their bank details to Sofort GmbH. |
| The sensitive bank details are not released to the retailer, but to an external service provider. The payment service checks the customer's ability to pay. | Due to limited data protection, Sofort GmbH can view the account balance and other details. |
| You can log in with online banking access data. | Until fall 2025, customers and online merchants will be able to use instant transfers for a fee. |
Giropay
This is a payment method from German banks and savings banks that enables convenient payment directly from your current account. This payment system for online stores is one of the fastest payment methods and does not require any additional costs from shoppers or online merchants.
| Advantages | Disadvantages |
| You don't have to disclose any bank details, just legitimize your own Giropay account. | Not all banks offer Giropay payments. |
| Thanks to immediate confirmation of payments, the goods are dispatched quickly. | In the event of incorrect transfers, the customer himself is responsible for incorrect entries. |
| As Giropay guarantees the payments, the risk of default is reduced for the merchant. According to the buyer protection, the money-back guarantee is effective. | Payments abroad are not always possible, as not all cards support Giropay. |
Amazon Pay
Amazon's payment processing service enables online purchases to be made via an existing Amazon account. In the online store, this is one of the payment methods that enjoys a high level of trust among customers.
| Advantages | Disadvantages |
| The shipping giant is well known and offers a high level of security to online retailers. | You should pay the fees for using it. |
| It is easy to use. | It is incomprehensible how Amazon uses customer data to evaluate purchasing behavior. |
| It is incomprehensible how Amazon uses customer data to evaluate purchasing behavior. | The use of this payment method in the online shop is not recommended if customers do not have an Amazon account. |
Payments in advance
Orders are paid by the buyer to the retailer. This is a less popular method because it delays the purchase and shipping process. The goods are only dispatched after payment has been received in the merchant's business account.
| Advantages | Disadvantages |
| It is not necessary to send the bank details to the store. | If your online store does not offer any other payment methods, the number of abandoned purchases may increase. |
| The risk of default for the retailer is excluded. | Buyers risk not receiving their goods. |
| There are no costs for online retailers. | You have to wait a little until the goods are dispatched. |
| Payments are very simple. | If the store is unknown, customers don't have the confidence to store there. |
Payment by cash on delivery
This involves a transportation service. Customers pay for their orders when they receive the goods (at the post office or a courier at the front door). This payment method is not as popular.
| Advantages | Disadvantages |
| Thanks to the immediate dispatch of the goods to the customer, waiting times are reduced. | If the customer does not receive the goods, the retailer must pay the cash on delivery charges. |
| The goods will be paid for in any case and only then handed over to the buyer. | As card payment is usually not possible, the customer must pay the invoice amount in cash. |
Coupons or vouchers
Such a payment method is considered a supplement to the above-mentioned payment methods in the online store. Vouchers can be used to pay for purchases. In most cases, customers make purchases in excess of the voucher value. The online retailer then benefits.
| Advantages | Disadvantages |
| Coupons and vouchers can be used to attract new customers or strengthen customer loyalty. | Vouchers are a so-called discount that leads to a reduction in the retailer's margin. |
| The exchange risk is not great. | Problems can occur with merchandise management systems, especially if they are outdated. |
Frequently asked questions
What are the most popular payment methods for webshops?
The most popular payment methods are purchase on account, credit card payments and PayPal.
Which payment methods work similarly to PayPal?
Amazon Pay is similar to PayPal in other aspects such as the process and fees.
Which payment methods offer buyer protection?
Secure buyer protection is provided under different conditions for credit card payments, PayPal and Amazon Pay.
Are you interested in a dedicated team?
Please contact our team, we will be glad to help you.
