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EU Payment Methods

Critically, payment method preferences are significantly impacted by geography. In some EU regions, card ownership can vary by as much as 99% of the population to just 27%.  There are a few different types of payment methods that merchants should be aware of in Europe:

  • Card Payments
  • Account-to-account bank transfers 
  • Buy Now Pay Later (BNPL) 
  • Direct debit 
  • eWallets. 

 

  • Pan Europe 🇪🇺
    • SEPA (Single Euro Payments Area) is a pan-European network that allows you to send and receive payments in euros (€) between two cross-border bank accounts in the eurozone. With SEPA, sending money within the eurozone is as easy as making your usual domestic bank transfers. There are three types of SEPA bank transfers, which offer three distinct services. Here’s how the SEPA Credit Transfer, the SEPA Instant Credit Transfer, and the SEPA Direct Debit Transfer work.
    • SEPA Credit Transfer
      • Usually used for one-off transfers, the SEPA Credit Transfer uses the IBAN (International Bank Account Number) and occasionally the BIC (Business Identifier Code) numbers of both the sender and the recipient’s bank accounts to move money from one bank account to another. Once the transfer is authorized, the recipient should receive their money within one business day after the payment was made.
      • Say you wanted to send €500 from your bank account in Germany to your friend’s bank account in France. As both countries are within the SEPA region, this would work just like a domestic transfer with the SEPA Credit Transfer. First, your German bank would take €500 from your bank account. Then, by using the IBAN—and if necessary, the BIC—numbers to find the correct bank account, the €500 would then be deposited into your friend’s account by their French bank, all within one business day.
    • SEPA Instant Credit Transfer aka SEPA Instant Payment
      • Also known as SEPA Instant Payment, the SEPA Instant Credit Transfer was established in November 2017. And true to its name, the SEPA Instant Credit Transfer is all about speed. Once the sender confirms a SEPA Instant Credit Transfer, the funds can be available in the recipient’s bank account in less than 10 seconds. This is because SEPA Instant Credit Transfers use direct routing from the sender’s bank to the recipient’s bank, without involving any intermediaries in the process. SEPA Instant Credit Transfers are also available 24/7, 365 days a year, unlike other banking procedures that may be delayed during the weekend or public holidays. 
      • However, to use the SEPA Instant Credit Transfer, both the sender and the receiver’s banks must be registered as SEPA Instant members. So before you hit send on a SEPA Instant Credit Transfer request, be sure to check that both your bank account and your friend’s bank account can accommodate SEPA Instant Credit Transfers.
    • SEPA Direct Debit Transfer
      • In contrast to the SEPA Credit Transfer and the SEPA Instant Credit Transfer, the SEPA Direct Debit Transfer is frequently used for recurring payments. Some examples of recurring payments may include your monthly rent, internet or electricity bills, or regular loan repayment installments. 
      • Similar to the other SEPA transfers, the SEPA Direct Debit Transfer also requires the IBAN— and occasionally the BIC—of both the sender and the recipient’s bank accounts. But because the SEPA Direct Debit Transfer works as a “pull-based” method of payment, it’s slightly different to other SEPA transfers—in this case, the roles are reversed and the recipient of the funds must request the money transfer from the sender.
      • First, the recipient who will receive the funds must send a request to the sender to allow the money to be withdrawn (i.e. “pulled”) from the sender’s account. Before any money can be transferred, the sender must sign a “mandate,” which is a contract that allows the recipient of the funds to take money out from the sender’s account on a recurring basis. This can be especially useful if you’d rather have your bill payments automatically taken out from your account each month, rather than remembering to pay the bill on time yourself. 
      • There are two types of SEPA Direct Debit Transfers:
        • The SEPA Core Direct Debit Transfer is available to individuals, and must be offered by all banks participating in the SEPA scheme.
        • The SEPA B2B Direct Debit Transfer is only available between businesses, and banks participating in the SEPA scheme may choose to offer it to their customers, but it is not mandatory.
  • UK 🇬🇧
    • BACS: Bankers’ Automated Clearing Services. Bacs payment services are operated and managed by Pay.uk, an organisation responsible for the UK’s retail interbank payment systems.
      • There are two main types of Bacs payment;
        • Direct Debit, where one party has been given permission to pull money from the bank account of another party, and
        • Direct Credit, where a party deposits the money in the other party’s account.
    • Bank-to-Bank payments can also be made through Faster Payments and CHAPS. Faster Payments allows for near real-time payments between bank accounts in the UK. Meanwhile, CHAPS is a same-day payment method for high-value transactions (e.g. for buying property).
    • PayPal
    • Klarna, ClearPay (aka AfterPay outside EU)
    • Pay By Bank App (MasterCard) and Pay with bank Transfer (Amex)
    • PayM (Shutting down in 2023)
  • France 🇫🇷
    • PayPal
    • Local card scheme – Cartes Bancaires.
  • Belgium 🇧🇪
    • The most popular options for making payments online are Bancontact payment system, debit (Bancontact/Mister Cash) and credit cards (Visa, MasterCard, American Express), as well as alternative payment options, such as PayPal, iDEAL.
      • Bancontact: Bancontact payment method relies on a single authentication to process payments. As with other payment methods in this list, users are transferred to a Bancontact window to authenticate before being redirected back to the original website for payment confirmation. 
      • iDEAL
      • Paypal
  • Poland 🇵🇱
    • Przelewy24 is a must-have for merchants entering the Polish e-Commerce market. Przelewy24 is an online banking payment solution used by more than half of Polish online shoppers. It is a real-time bank transfer system covering all major Polish consumer banks.
    • BLIK is a Polish mobile payment system that allows millions of mobile phone users to pay online, make in-store purchases, and withdraw cash at ATMs.
  • Spain 🇪🇸
    • Spain’s 47 million population is eager to pay for their online purchases using their debit card or credit card, whereas slightly over 40 percent were more inclined to use online payment systems, such as PayPal
  • Germany 🇩🇪
    • SEPA direct debit
    • GIROPay: Giropay is a popular real-time online bank transfer method in Germany. Giropay enables customers to make payments directly via their bank account. Since 2006 Giropay has integrated more than 1,500 German banks.
    • PayPal
    • SOFORT
    • Klarna
  • Sweden 🇸🇪
    • Swish
    • Klarna
  • Austria 🇦🇹
    • EPS: Austrian banks allow their customers to use EPS, a bank-to-bank transfer payment method. 80% of Austrian merchants allow their customers to pay via EPS, so it’s worth considering if you do a lot of business in the country. 
  • Portugal 🇵🇹
    • MultiBanco: \MULTIBANCO is a Portuguese interbank network that can be used as a bank transfer or cash payment (run by Sociedade Interbancária de Serviços S.A. or SIBS Payment provider). Multibanco is supported by the main banks in Portugal therefore it is a well-known and widespread payment solution in the country.
  • Netherlands 🇳🇱
    • iDEAL – Over 53% of Dutch customers prefer to use iDeal at checkout. 
    • Giropay boasts connectivity to over 1,500 German banks across the country, all but guaranteeing German customers can execute a direct bank transfer to another German customer. Giropay accounts for 51% of all online purchases made in the country.