Meaning of Payment Methods

Whether in the supermarket, in the restaurant around the corner or when ordering on the Internet, tempting offers lurk everywhere. Regardless of the form in which your customers make their purchases, you will always receive the corresponding amount of money in return. Here you will find information about which payment methods are available and which of them are particularly popular with customers.

What does payment method mean?

As soon as money changes hands, a payment method is available. It does not matter whether it is an internet purchase or an on-site service. The form of money transfer does not matter. Specifically, the money transfer is divided into these three groups:

• Cash payment
• Half payment
• Cashless means of payment

Cash payments are still preferred in direct contact between buyer and seller. In the case of half-payment, only an account is inserted into which one of the parties involved either pays in or withdraws money. The semi-acceptable means of payment include, for example, the cashier’s check or the payment slip. However, these forms are rarely found. Cashless money transfers have become far more important. In the meantime, numerous sub-forms such as Paypal, Sofort-Überweisung or Amazon Pay have become established.

What payment methods are there?

In addition to paying with cash, more than just a cashless payment option has long since proven itself on the market. Overall, you can choose between these nine ways to securely pay for your purchase:

Form of payment	importance
Cash / EC card	secure payment method in local shops When paying with an EC card, the PIN is required, in some cases a signature is sufficient
Paypal	Payment with your own Paxpal account Immediate payment confirmation to the payee, so a faster shipping is possible, Safe payment method, as customers are protected by buyer protection
Credit card (e.g. VISA, MasterCard)	Shipping as soon as items are available The invoice amount will only be debited some time later
Prepayment / transfer	Buyer pays the invoice amount before receiving the goods Shipping is usually after receipt of money
Instant bank transfer	TÜV-certified online payment system for online purchases comparable to online banking (PIN / TAN entry required Data for transfer are already stored
Purchase on account (bank transfer)	Buyer receives the goods in advance and transfers the invoice amount if the goods meet the expectations
Direct debit	Consent to debit the invoice amount from the bank account immediate dispatch of the goods possible
Amazon Pay	Payment via Amazon customer account Amazon retains payment information Safe payment method thanks to Amszon buyer protection
Cash on delivery	Payment directly to the postman upon receipt of the goods

The most popular payment methods

While Germans primarily rely on tried and tested payment methods, innovative cashless models, such as paying via smartphone, are extremely popular in the USA. In Germany, payment by cash, traditional bank transfer and the SEPA direct debit are still among the most popular forms of payment. In the course of the continuously growing online market, Germans are increasingly open to modern methods such as PayPal and Amazon Pay. Since the forecasts for online retail are extremely positive for the coming years, it can be assumed that innovative payment methods will also gain increasing acceptance here.

Tip!

If you want to introduce an online payment system, you can find out everything about the possibilities, advantages and disadvantages as well as a comparison of the providers in our guide.

The common payment methods in retail

In the on-site shop, the choice of payment methods at the checkout is severely limited. The direct exchange of cash still dominates here. This makes it easy for your customers to keep good control of the expenses they have made, especially with small sums.

Payment by debit or credit card is also becoming increasingly popular. Your customers can take the selected goods with them immediately without having to search for the right change.

The common payment methods on the Internet

Internet purchases have long since become commonplace for a large part of the population. The selection is far more varied here than in the local specialist shop. Most retailers offer a wide range of payment methods so that an order can be processed as quickly and easily as possible from the comfort of your home. In addition to banks, innovative financial service providers have now been able to secure a firm position in the market. The classic payment method transfer and the SEPA direct debit procedure is gradually becoming less important. Specifically, all payment methods that are available online can be assigned to one of these two main groups:

Payment methods with bank	Payment methods without a bank
Debiting the amount of money from the account directly in the online shop	Debiting takes place via a service provider’s own customer account, such as the PayPal payment method
Payment with the usual online banking data	Payment with your own account with the respective company
often cooperation with service providers such as SOFORT-Überweisung or Giropay

When paying via the Internet, it is entirely up to you which payment methods you make available. The prepayment method is often used, especially for new customers.

These payment options are also widespread:

• Purchase on invoice
• Direct debit
• Paypal
• Credit card
• Cash on delivery