Direct debit, credit card payments and Paypal – online payment methods have changed and numerous methods are now available. “Cash or credit” is now a question you will only hear in a regular store. The number of choices makes it difficult to choose an online payment method.
Online payments with credit card are available worldwide. Keep in mind that unlike in France or the U.S., customers in Germany often do not have a credit card. The process is easy: you simply enter the credit company, name, address, credit card number, expiration date and security code (CSC) in order to complete your payment. It is easy to pay foreign service providers. Secure transmission of data is necessary. The symbol of a lock should be displayed in your browser if the data transmission is encrypted and secure. The so-called SSL protocol is usually used.
HINT: If the credit card payment is not verified with a signature, the payment can be disputed and the money may be refunded.
Electronic direct debit
This method requires the buyer to give the seller permission to withdraw funds from the account. The risk for abuse is pretty low because it is possible to dispute transactions within a certain time period. There is some risk for the seller in case the buyer’s account does not have sufficient funds. This payment method is usually only used during domestic transactions. It is not ideal for small amounts because a written signature is required for the direct debit authorization, thus requiring additional written correspondence.
This method is the most secure payment method for buyers. Some retailers allow customers to pay for products ordered online after they receive an invoice. This is the most secure payment method for the customer. The customer transfers the due payment amount to the account listed on the invoice after he or she receives the product. The seller assumes the main risk of this payment method because some customers may order products despite not having the funds to pay for the item. Therefore, the total value of products purchased using this method may be limited.
This method is the opposite of paying an invoice is issued. The risk is assumed by the customer because the transferred amount may not easily be refunded. Some small businesses may only offer prepayment because their items are made to order. You should only agree to this option if you are purchasing products from a reputable seller.
Cash on delivery
This method used to be common, but it is barely used anymore. Customers pay the purchase price when they receive the product. The money is paid to the mailman. This payment method is not much safer than prepayment because you can usually only inspect the product after you have rendered payment.
Paypal is a part of eBay and is the largest provider for online payment services. After the customer has registered with Paypal, the American company acts as a third party between the seller and the bank. The customer’s bank account or credit card is connected to the Paypal account, and the email address serves as the account number. If customers do not have a credit card, they can still use Paypal by transferring money to their Paypal account. Then they are able to send and receive money. The Paypal account is free, but a fee must be paid for funds received.
The online payment system Firstgate is well established. Once registered, one can pay for purchases at affiliated online stores with a simple click of a button. A small fee is charged for this service.