Go-to-market with the right payment methods
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Types of payment methods country guide
Whether it comes to the way we drive, the food we eat, or the way we pay, each European country does things a little differently.
Austria is a small e-commerce player, that’s seen expansive growth over the last few years. High internet penetration combined with a consumer preference for cross-border shopping, means that Austria ranks third within the EU for international online shopping, surpassed only by Luxembourg and Malta.
Visa debit cards are the current payment method of choice; however, Austrian consumer credit is at an all-time high, and Visa and Mastercard credit cards are gaining popularity. Domestic brand, EPS online banking is a banking transfer method offered by all major Austrian bank and account and are accepted by 80% of e-commerce merchants. Digital wallets are the fastest growing method, with PayPal account for 15% of alternative payments.
Merchants entering Austria should ensure that they support credit and debit cards and EPS as a minimum.
Belgium is a market with an international mindset, crossing borders is second nature, even when it comes to shopping. Almost 50% choose to buy online from merchants based in other EU countries with their Dutch neighbors the main benefactors.
Credit and debit cards are the payment method of choice, with Bancontact reigning supreme. The cards are combined with Maestro and can be used for online and in-store transactions. For the consumer, transactions are free of charge and are offset to the merchants. But as Bancontact is one of the securest payment methods out there, the risk of a chargeback is minimal. No wonder, there are more Bancontact cards in circulation than there are Belgian citizens!
Other popular payment methods also include Visa and SOFORT (Klarna). For merchants entering the Belgian market, the opportunity is ripe if they have Bancontact onside.
The Czech Republics' e-commerce market is rather on the small side, but higher internet penetration is contributing to rapid growth in recent years and is one of the fastest-growing in Europe.
The countries payment mix is relatively simple, with cash dominating the landscape. Settling payment on delivery with cash is the most popular way to pay for online orders, representing 45% of transactions. Visa and Mastercard debit cards are gaining in popularity along with online banking transfers.
Denmark may be small in population size, but they’re mighty when it comes to payments. In fact, the Danes tout the second highest card spend per person in Europe and spend 50% more online than the average European every year.
The most popular payment method is Visa/Dankort. This combination debit card stands out from the crowd, as it’s completely nationalized and transaction fees are capped, which makes it one of the most efficient and cheapest payment methods on the market. It’s also convenient for consumers and merchants, if you’re not supporting Dankort the funds will simply debit via Visa instead.
Tech savvy Danes aren’t averse to alternative payments either. With mobile wallet Mobile Pay and online banking app Trustly overshadowing Apple Pay and Google Pay. Merchants entering the Danish market should consider a payment method mix of all three payment methods.
Like it's Nordic neighbors, Finland is a high-growth e-commerce market and there are plenty of opportunities for merchants entering the market. Cross-border commerce is common with 53% of online shoppers purchasing products from abroad each year.
Finland is one of the European leaders in internet and mobile banking services, and bank transfers are the payment method of choice, with a 57% share of the country's total payments. Visa and Mastercard credit cards are also a preference both instore and online. Ewallets such as PayPal are gaining in popularity however they only account for 7% of transactions.
To appeal to shoppers, merchants should integrate banking transfer, Visa, and Mastercard cards into their payment mix.
French consumers are driven by a love of online discounts and price comparison websites. But that doesn’t mean they shy away from spending, in fact, France is the second-largest e-commerce market in the region and accounts for over 15% of the overall European spend.
Cartes Bancaires, previously known as Cate Blue, is the markets leading payment method. With over 64 million cards in circulation, it’s used by almost every French citizen. Cartes Bancaires is a credit card that’s combined with Mastercard or Visa, which is its recipe for success, as consumers are automatically covered by Visa Purchase Protection.
Alternative payment methods include mobile wallet Paylib, which is used by over 40 million consumers yearly. In comparison, PayPal is third in the running and is used by just over 7 million people. Merchants should still consider offering PayPal in their mix, as security is still a big concern for French consumers, and PayPal has a strong reputation in this field.
The e-commerce market in Germany is one of the largest and fastest-growing markets in Europe, but it’s also one of the most fragmented. The use of debit and credit cards, along with e-wallets such as PayPal has only gained popularity in the last decade but are showing some serious potential due to the consumers’ desire for security and convenience. Payment methods such as SEPA direct debit, Giropay, and, SOFORT (Klarna) dominate the eCommerce market. While in retail, open invoicing is still the most common and trusted method for consumers, as the payment is settled after delivery of the products.
Merchants moving into the German market will need to do a thorough research when considering what payment mix is right for them, but overall, there has never been a better time to sell to German customers.
Like other developing markets, many Greek consumers are unbanked, which means that they don’t have reliable access to debit or credit cards. Only 1/3 of the population has access to smartphones and internet penetration is just under 60%. While the reliance on cash is prevalent, over the last six years, Greece is making steady strides to becoming a cashless society.
Most online purchases are made with major credit card brands, Visa, Visa Electron and, Mastercard. These are closely followed by the traditional online bank transfer and PayPal, which holds 1% of the market.
With a strong enthusiasm to embrace overseas e-commerce merchants, Irish consumers account for the highest rate of cross-border shoppers in Western Europe. They even spend 26.6% more online than the average European.
The most popular payment methods are debit and credit cards, with Visa, Mastercard, and American Express leading the charge. Mobile shopping accounts for more than 42% of online sales and which in turn has triggered the adoption of digital wallets, led by Apple Pay and Google Pay. Domestic and overseas merchants have a strong opportunity in the Irish market and should consider a simple payment method mix of mobile wallets, debit and credit cards.
Italy’s e-commerce market may be compact compared to some of its neighbors. But Italians have been making up for lost time when it comes to online shopping and can now boast that they’re one of the fastest-growing e-commerce markets in Europe.
The most popular payment method is Nexi debit and credit cards which are combined with Visa or Mastercard. Italians refer to all cards collectively as credit cards, however they’re not the standard credit cards where you pay back the allowance over time. Nexi works similar to a charge card and must be paid back when billed. Actual credit cards have been slow to take off due to high issuing and service costs.
Prepaid cards, where cash is uploaded on to Postepay cards (also combined with Visa) remains a major player in the online payments market. Digital wallets are also gaining popularity and are used by a third of the market.
The Dutch payments method landscape is unique due to its notable absence of credit cards. Dutch culture doesn’t embrace debt and many retailers won’t accept credit cards. As The Netherlands boasts one of the highest internet penetration rates in Europe (99%), e-commerce is booming. While buying from domestic e-commerce brands is the first choice, Dutch consumers don’t shy away from cross-border buying, with most foreign purchases being made from their Belgian and German brands.
The payment methods mix is relatively simple, with a domestic brand iDEAL being the dominant preference for consumers. iDEAL is a bank transfer system that’s covered by all Dutch banks and is used to complete over 60% of all e-commerce transactions in The Netherlands. Mobile wallets such as Apple Pay, and Google Pay are rising in popularity and are predicted to slightly offset iDEAL’s hold on the market soon. Merchants looking to enter the Dutch market should be offering iDEAL as their payment method of choice and consider integrating mobile wallets in the future.
With just over 5million residents, Norway stands out as a market with a diverse payment method industry and rapid e-commerce growth. Norwegians have one of the highest internet penetration rates in Europe (99%), which has developed consumers’ taste for cross-border buying, especially when it comes to fashion.
Credit cards, Visa, and Mastercard are the most popular payment method both in physical stores and online, closely followed by bank transfers. Norwegians also enjoy alternative payment methods, notably Klarna, AfterPay, and PayPal. When it comes to mobile payments, Norway trails behind its Nordic cousins due to a lack of a centralized system that’s halting adoption. Merchants entering Norway should be offering a diverse choice between credit cards and alternative payments, especially when operating online.
Polish consumers are reserved when it comes to e-commerce, which has been slow to pick up in comparison to other Western European countries. However, this rate is expected to see explosive growth in the next five years driven by improvements in employment rates, higher salaries and strong consumer confidence.
Currently, bank transfers via Przelewy24 hold 80% of the online payment method industry. When it comes to credit cards, Visa and Mastercard lead the way however, they’re only used in 7% of online transactions. In-store, cash is preferred, particularly among the older generation.
Offering Przelewy24 is crucial if you’re expanding your online shop in Poland.
Although Spain is a way behind other neighboring e-commerce markets, it’s now one of the fastest-growing markets in Europe, driven by the rapid and wide adoption of mobile commerce. In fact, Spain has the highest mobile device penetration in Europe, ¾ of the population has regular internet access.
Most transactions are driven by Visa and Mastercard debit and credit cards, which account for 46% of online purchases. Along with paying cash on delivery, e-wallets such as PalPal and Trustly also have notoriety due to convenience and perceived security. In-store payments are dominated by cash, and there are more ATMs per million inhabitants than any other country in Europe.
Merchants entering the Spanish e-commerce market will need to offer debit and credit card payments, with a range of e-wallets to appeal to a younger audience.
Sweden is paving the way to becoming one of the world’s first cashless societies, just 1% of its GDP circulates in cash. The Swedish government is also developing its own cryptocurrency, which is another world first.
Despite Sweden’s innovations in digital currencies, preferred payment methods tend to stay on the more traditional side. Visa and Mastercard debit cards are the firm household favorites, for both in-store and online transactions. E-commerce is performing strongly due to the enthusiastic adoption of mobile commerce, in which Sweden is one of the leading European markets. This is introducing a desire for mobile wallets like PayPal and deferred payment options, such as Klarna, a popular homegrown buy-now-pay-later option.
Despite a shaky political environment due to Brexit, the United Kingdom is one of the leading economies in the world and its thriving e-commerce market is the most important in Europe. Almost 8% of the country’s GDP comes from e-commerce sales. UK shoppers spend more than average compared to their neighbors, however, a weaker GPB means that British consumers are now less likely to shop from overseas brands.
The payments market is particularly dynamic. Brits are world leaders when it comes to paying by card and UK shoppers average at 2-3 credit and debit cards per person, with Visa and Mastercard the firm favorites. Cards dominate in-store transactions, but cash is still prominent. Digital wallets are also rising in popularity, with PayPal being the dominant player, accounting for 23% of online transactions and Klarna leading the buy-now-pay-later space. Interestingly, online banking is only now gaining traction due to the rise in internet-only banking or neobanks.
Merchants expanding into the UK will need to offer Visa, Mastercard, and PayPal as a minimum in their payment mix.
Payment methods glossary
International credit and debit cards
A payment card that uses the Visa network, which is the largest in the world and is accepted in more than 200 countries. Visa does not issue cards but partners with financial institutions instead.
The world's second-largest credit card network, and owns Maestro debit and prepaid cards.
The dominant credit card in the US but also accepted in 160 countries. Also known as AmEx, they offer holders a variety of perks.
Local payment methods
The preferred card in Belgium, which is also combined with Visa and Mastercard.
The preferred card in Italy, which is also combined with Visa and Mastercard.
A card that is nationalized by the Danish government and is the preferred type of payment method in Denmark.
Cartes Bancaires / Carte Bleue
The preferred payment method in France that is combined with MasterCard.
Germany’s preferred payment method, using real-time bank transfer.
The Netherlands preferred payment method, using real-time bank transfer.
The preferred payment method in Poland, using real-time bank transfer.
SEPA (Single Euro Payment Area)
A direct debit or credit transfer of Euro payments within the Single Euro Payment Area. The funds are transferred and made available to the recipient instantly.
UK direct debit
The preferred method of recurring payments in the UK.
An online wallet that can be prepaid or linked to a customer’s bank account, the transaction is made instantly using a computer or mobile device. eWallets are becoming one of the more popular payment methods around the world, especially in emerging markets.
Mobile payment and eWallet serviced for Apple Inc. products that can be used online or in store.
Formally Android pay – an eWallet serviced for Android products that can be used online or instore.
Used for online transactions, PayPal customers can upload funds or link their account to their credit or debit card.
Alternative payment methods
An online payment method that allows customers to pay for an online purchase after receiving them. Customers only need to pay for the items they’d like to keep.
A popular buy-now-pay-later option, customers can pay for their online purchases within 14 or 30 days after shipping, with the time frame dependent on the store.
A fast way for European consumers to pay for online purchases directly from their bank account.