European online payment market: think global, act local!

15 December 2016

Europe represents a diverse payment ecosystem, with each country having its own specific online payment traditions, preferences and solutions. Even though most online transactions are paid by credit cards, there are still various country-specific e-payment alternatives like direct debit and invoice payments. If you are planning to run a successful international online business, localization is a key aspect of unlocking the huge potential of the European market. It is important to learn more about the most popular local payment methods and offer a relevant range of payment options according to your target audience.


iDEAL is an Internet payment solution tremendously popular in the Netherlands – according to statistics, it accounts for 60% of all Dutch electronic payments. Launched in 2005, iDEAL enables users to pay for purchases made in web stores using direct money transfers from participating banks. When checking out, customers are forwarded to the online banking environment offered by their financial institution where they need to approve the pre-filled payment instruction. After that the necessary amount is withdrawn from their current bank account and redirected to the merchant’s bank. Typically, there are no bank charges when paying with iDEAL.


Founded in Stockholm in 2005, Klarna is a leading e-payment instrument used in Sweden (it accounts for nearly 40% of all electronic payments) and in other Scandinavian countries. Their business model reminds of the Bill Me Later service: instead of collecting payments from customers immediately, Klarna offers the concept of ‘after delivery payment’, which means that customers can pay for merchandise during 14 days after its delivery – or they can simply return the products. With the Klarna account option, it is also possible to take advantage of their credit line and specify how much you can afford to pay – the full amount or something smaller.



Founded in 2008 in Sweden, Trustly provides B2C and C2C online payment solutions through its direct payments technology. It is reported that in 2016, the company has reached more than 67 million customers in 29 European countries, including Sweden, Finland, Norway, Denmark, Malta, Estonia, Poland, and others. After opting for Trustly, the customer needs to enter his or her regular online banking credentials and confirm the transaction. Since all payments made via Trustly are authorized by customers during their Internet banking session, the risk of fraudulent activity and chargebacks is close to zero.

SEPA Direct Debit

SEPA (Single Euro Payments Area) Direct Debit, also known as European Direct Debit and SEPA-Incasso in the Netherlands, is a universal online bank-to-bank payment method allowing merchants to collect one-off or recurrent payments in euros from EU customers. It works this way: after purchasing goods or services, you need to sign a SEPA Direct Debit Mandate allowing the seller to collect the necessary amount from your existing account. There are two main types of SEPA Direct Debit schemes: the first is SEPA Direct Debit Core offered for private and business customers and allowing the possibility of claiming a refund, and the second is SEPA Business-To-Business Direct Debit used by firms. In this case, the payer is not able to claim a refund.


ELV (Elektronisches Lastschriftverfahren) is a cost-efficient Electronic Direct Debit scheme popular in Germany (25% of all online payments) and offered by many web-based companies for transactions in EUR. By opting for the ELV payment option, the customer authorizes the merchant to withdraw the amount owed directly from his or her account. In comparison with classic card payments, this solution is much cheaper – typically, customers don’t need to pay any transaction fees if they have enough money to cover the purchase. Plus, you have the right to cancel an ELV transaction within 6 weeks.


Available in 13 countries across Europe including Germany, UK, France, Italy, Spain, Austria, Belgium, and others, Sofort (Sofortueberweisung) is a popular online direct payment system for people who do not want to share their plastic card information online due to fraud and similar concerns. This payment system is also based on online banking – upon checkout, you will be redirected to its secure online banking environment where you need to enter your login details and approve the bank transfer to the seller’s account.



Giropay is an electronic bank transfer instrument popular in Germany. It is used by over 40 million customers and accounts for 16% of all online transactions in Germany. Giropay works similar to Sofort – if you have online banking enabled, you can access your bank account via their website and authorize withdrawing funds from your current account. Paying via Giropay is usually free and doesn’t require any registration. The benefits for the merchant are the following: they can get immediate payment confirmation and there is no charge-back risk – payments made via Giropay cannot be reversed once they have been executed by the bank.

When it comes to selling internationally, there are no physical borders or permissions that you need to receive. However, it is necessary to take into consideration that there are various country-specific payment preferences that can affect your conversion rates. That’s why it makes sense to adopt localized payment alternatives or take advantage of a universal flexible payment platform offering numerous payment options. This selling strategy will result in an enjoyable shopping experience that your foreign buyers won’t mind to repeat.

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