Ecommerce payment systems

Ecommerce payment systems

When paying in the online store, it is possible for customers to choose the payment system that suits them best. This often ranges from PayPal to purchase on account to payment in advance or cash on delivery. Every store owner should find out which system their own customers favor in the end. This improves the customer journey and consequently also increases sales.

Table of contents

  1. What are ecommerce payment systems?

  2. Online store success

  3. The different payment methods

    1. PayPal

    2. Credit card

    3. Purchase on account

    4. Direct debit

    5. Klarna (instant bank transfer)

    6. Giropay

    7. Amazon Pay

    8. Apple & Google Pay

    9. Installment

    10. Prepayment

    11. Cash on delivery

    12. Vouchers & Coupons

  4. Focus on customer experience

  5. FAQs

What are ecommerce payment systems?

Ecommerce payment systems are largely used for cashless payments in online stores. Among the Germans' top favorites are PayPal, purchase on account, and credit card payment. The big advantage for store operators is that customers can pay easily at checkout and choose their favorite from the methods on offer. [1]

Online store success with payment methods

Everyone has a different strategy: Some focus completely on the ecommerce sector, while others do best with a multichannel strategy. In this context, companies create their own online store[2] alongside the brick-and-mortar store in the city center. The choice of electronic payment system is also one of the most important success factors. 53 percent even regularly cancel their purchase if they do not find their favorite payment method on the website (Statista, as of 2014). [3]

Shopping cart abandonment is one of the worst things that can happen to a store operator, because potential customers are willing to buy but then bail out at the last second. Quality is more important than quantity, because if companies bombard their customers with too many payment methods, they will be put off.

The different payment methods

Over 40 systems exist in Germany, but only a few are actually used by consumers. The most important payment methods are:

Payment method




Fast payment processing, high security

Customer account necessary


Pay only when product is there

Risk of payment defaults for merchants

Direct debit

Trustworthy method

Problems, in case of wrong data or no account coverage → high time expenditure

Credit card

Fast payment

Customers can claim money back


Simple integration, high payment security

Only a limited number of banks participate

Amazon Pay

Amazon customers

Service fee for transactions

Cash on delivery

High security for the trader

Obsolete method

Klarna/immediate bank transfer

Security for the customer

Fees for dealers


High security for companies

Shipping delayed

Installment purchase

Risk assessment of the customer and distribution of the amount due.

Traders wait longer for their money

Apple and Google Pay

Convenient for the user

Accounts required


Nowadays, almost every store offers PayPal as a payment method during check-out. The customer benefits here from a simple as well as lightning-fast payment with just one click. Store operators are also on the safe side, since it is not easy for buyers to cancel their order. Fees are charged per transaction, and for small businesses these are around 1.9 percent (approx. 0.35 euros) - a disadvantage. In addition, PayPal accounts are often the target of hacker attacks and the data is stored centrally on servers. But the success proves the payment system right: Over 433 million[4] people use PayPal. This payment method is therefore an absolute must for your own online store!

Top: Customers can also pay for their purchases after 30 days, which makes PayPal even more attractive!

Credit card

It was not until ecommerce that payment by credit card really took off. In the meantime, it has become one of the most common payment options and offers store operators payment security, because the customer cannot simply make chargebacks. Unfortunately, credit card fraud is not uncommon, and store operators may be left with the costs. If a company wants to protect itself twice, the 3D-Secure procedure can help: Here, a reversal of liability comes into effect, which ultimately means that the cardholder has to pay for any damage that occurs.

Purchase on account

A purchase on account is popular with many customers - first try on or hold live in their hands and then pay. Accordingly, this payment method is also at the top of the list of favorites. An immense advantage for the consumer: Defective or unsuitable goods do not have to be paid for, but can be returned directly. In addition, buyers do not enter any sensitive payment data with the store, which minimizes the risk of data misuse.

For retailers or store operators, however, this method also means a higher risk, because payment defaults can occur. For smaller companies with low profit margins in particular, purchase on account is therefore rather unprofitable, as high fees are incurred. A payment service provider provides a remedy here and protects store operators against risks with a percentage fee. It is also advisable to set up an automated credit check. This involves a real-time credit check to ensure the customer's payment security.

Direct debit

Many Germans favor the direct debit method. After the purchase, the buyer doesn't have to think about anything, because the money is collected automatically. In addition, the store tends to ship the goods faster and direct debits can be reclaimed in the event of an error on the part of the store. It also makes sense for entrepreneurs to rely on this payment method, as it is uncomplicated and inexpensive. Just as with the invoice, payment defaults can also occur here. However, this is a much lower risk in comparison. Payment service providers also offer protection against payment defaults.

Klarna (instant bank transfer)

With Sofortüberweisung with Klarna, the customer logs on to the web service of the Klarna Group (formerly Sofort GmbH) with his normal bank data and thus does not have to transmit his sensitive data to the merchant. No additional registration or credit card is required. However, this is also a drawback for some: although they do not enter their own data with a merchant, they do enter it with a third-party service provider. Caution: As the sole means of payment in an online store, instant transfer is not permissible - as a court ruling has shown.

Also the payment on account works with Klarna: Pay after 30 days! All purchases are visible in one portal and customers keep track of their purchases.


Without a credit card, buyers can also reach their destination with Giropay. Here, the customer must legitimize his own account for Giropay. However, bank details remain secret. The risk of default for the merchant is low, since a direct payment confirmation is received. Not all banks participate in Giropay; only the following offer this payment model to their customers:

  • Postbank

  • Savings Banks

  • Volksbanken and Raiffeisenbanken

Accordingly, this method is also only an option and not absolutely necessary, as it is not sufficient as the sole payment method.

Amazon Pay

Loyal Amazon customers prefer Amazon Pay as a payment method for other online stores as well, because they have great trust in the ecommerce giant. Moreover, no additional data needs to be entered on other platforms, as everything is already stored on Amazon. Amazon's promise: With Amazon Pay, consumers complete their purchase 87% of the time, which increases a company's sales. One drawback for merchants: fees apply here as well, similar to PayPal. In addition, it is not clear whether Amazon uses the collected data to analyze users' buying behavior. This payment method is worthwhile if many of the potential customers are registered with Amazon.

Apple & Google Pay

In order for Apple and Google Pay to function properly in your own online store, these payment methods must be integrated into the corresponding store software. A check-out process is not necessary here, since all important data is transmitted directly with the payment. With Apple, the buyer confirms the order on one of his or her end devices using Touch ID or Face ID and the purchase is completed. Since this method is very convenient for Apple and Google customers, the purchase abandonment rate drops enormously.


Installment payment allows customers to split the amount due into smaller sums. This is advantageous when other everyday costs (such as rent, car payments, etc.) reduce the buyer's cash flow. Either payment providers or banks directly take care of the process. Customers fill out a form online for risk assessment - the credit check is carried out within a few seconds.


Less common nowadays, but very popular in the past: payment in advance. Here, the customer completes the transfer independently before the sale, which protects companies from non-payment. In addition, buyers who do not like to deposit their data with foreign platforms feel addressed. Since prepayment delays shipping, this payment method is rather out nowadays. If a store only offers this payment method, potential customers tend to cancel the purchase. If there is a high level of customer trust, prepayment is still advisable because customers trust the store and also make the compromise of waiting longer for their goods.

Cash on delivery

When paying cash on delivery, customers pay for the goods either at the front door when they receive them, when they pick them up at a parcel store, or at the post office. This method is not so common in ecommerce anymore, but should be mentioned nevertheless. It offers a high level of security for store operators, as the goods are not handed over to the customer without prior payment. In addition, buyers benefit from fast shipment of goods. However, this payment method is not suitable for people who work in the office every day or are rarely at home for other reasons - because no one else can accept the package for them. Merchants pay COD charges whether the package reaches the recipient or not. This payment method has existed long before ecommerce and dates back to the days of catalog ordering. In ecommerce, this option still plays a crucial role, especially for older target groups.

Vouchers & Coupons

Although vouchers and coupons are not a means of payment in the true sense, customers can still use them for payment and should therefore be mentioned. For successful customer acquisition, discount promotions or codes for certain periods are suitable so that consumers are more likely to order from the corresponding online store.

Focus on customer experience

Finally, it is very important for all payment methods to focus on [5] user-friendliness. To prevent customers from bailing out or having too many payment systems to choose from, it is advisable to focus on quality rather than quantity. Between three and five payment methods are sufficient to satisfy website visitors.

Store operators should also use a payment service provider. This protects them from major payment defaults for a small fee and means they do not have to take care of receivables management themselves.

Make a selection:

Always keep in mind the risks that a payment method entails. Involving a provider for credit assessment and an external one for factoring makes sense in order to protect yourself in the best possible way.

Customer experience: Which payment methods do your own customers prefer? A younger target group favors electronic payment systems, while the older generation still relies on payment models such as cash on delivery and purchase by invoice.

Check the fees of the payment methods in advance, otherwise high costs can follow.


What are ecommerce payment systems?

Ecommerce payment systems serve online stores as a payment method. From the selection of existing systems, store operators choose the right one for their target group.

What are the ecommerce payment systems?

There are over 40 different payment systems in Germany. Among the most important are PayPal, purchase on account, credit card payment and Sofortüberweisung.

Infoboxlinkvllt you can also find something more currentGraphic StatistaHere you can take a graph from Statista about payment options and user behavior :)

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