Which payment method is the best?

November 18, 2023, 10:07 a.m. |
Reading time: 12 minutes

There are now an almost unmanageable number of options for paying when shopping online. TECHBOOK presents the most common methods with their advantages and disadvantages.

Actually, you just want to quickly complete the online purchase and are suddenly spoiled for choice: Do you want to pay by invoice or with a credit card? Or would you rather use PayPal, Klarna, Amazon Pay or Paydirekt? In order not to lose track of the many different payment methods and payment service providers, TECHBOOK presents the most common ones and also looks at the respective advantages and disadvantages.

The invoice

The classic and safest method of payment for the buyer is the invoice. In the best case scenario, you can wait for the goods you ordered to arrive and then pay the bill via online banking or, in retro style, using a transfer slip. Despite business practice, this is risky for sellers and can mean additional effort if reminders or even debt collection procedures are necessary in the event of non-payment. For this reason, sellers often require confirmation that the amount has been transferred or do not even offer the payment method “on account”.

Advantages: Safe for buyers

Disadvantages: Buyers must actively take care of payment

Direct debit/direct debit

A safer way to prepay is direct debit, where you give a seller permission to debit an amount due directly from your account. All you have to do is provide your bank details and the seller will do the rest. The advantage of this system is that you can get the money back for up to eight weeks if you don’t receive the goods.

Advantages: Money can be gotten back, buyer doesn’t have to make any payment himself

Disadvantages: Many shops no longer offer it

Credit card

One of the most popular payment methods is credit card. Since purchases are increasingly being made from foreign shops in Germany and many retailers often do not accept German checking accounts, credit cards are a simple alternative. When paying, you only provide the credit card number, the expiry date and the check digit – the transaction is then noted immediately and the retailer can send the goods. In addition, with some providers, such as American Express, you collect points with every euro you spend, which can later be exchanged for award miles for flights, for example.

Advantages: Easily usable for payments on foreign sites, actually always offered, immediate confirmation from the merchant

Disadvantages: Possibly. Additional costs due to exchange rates for foreign currencies, chargebacks if the goods are not received are difficult, many credit cards cost money

Debit card

In addition to credit cards, debit cards from Visa and Mastercard are increasingly being used. Contrary to banks’ promises to their customers, some shops do not accept debit cards. Apart from that, the payment process is similar to that of a credit card. The big difference lies in the debit, which takes place immediately with the debit card.

Advantages: instant confirmation at the merchant, many debit cards are free

Disadvantages: not always accepted, chargeback is difficult if the goods are not received

Payment in advance

Advance payment is a payment method that used to be offered more frequently, but now only has a niche existence. Buyers pay the money in advance via bank transfer and the retailer only delivers when the money is with them. This is not only slow, but also risky for buyers. Because if you don’t receive the goods, there is no way to get the money back. Advance payment should only be used with trusted sellers.

Advantages: For some small shops that deliver to order, this is the only payment option

Disadvantages: No way to get the money back; Shipping only after receipt of payment

Cash on delivery

Cash on delivery is a very special type of payment that is completely analogue and is very inconvenient for retailers. It is therefore only offered very rarely. With cash on delivery, the bill is paid directly to the postal or parcel carrier. To do this, you must be at home when the delivery is made and have the money in hand. For this payment method, if it is offered, there are often high additional fees charged by the parcel service.

Advantages: Payment only after receipt of the goods

Disadvantages: You must be at home to receive the package, no right to open the oaket before acceptance

Beware of this cash on delivery scam on Ebay.

Payment service providers as alternative payment methods

Online (and offline) there are also numerous alternative payment services from third-party providers that can be chosen instead of classic payment methods and often have advantages, but also some disadvantages.


Paypal is a third party that acts as an intermediary between the buyer and the merchant. Instead of giving your bank details directly to the retailer, you just log in with your Paypal account and choose the payment method stored. This can be your bank account, credit card or even PayPal credit. Use is free for buyers. Sellers, on the other hand, pay fees for every transfer they receive. These are often already included in the online price and are therefore passed on to the buyer. However, in a few shops there is an additional fee for Paypal as a payment method.

Paypal deducts the money from your stored account and transfers it to the seller. This means you can contact Paypal if something doesn’t work. If there is a problem, you can get your money back using Paypal buyer protection.

Advantages: Excellent buyer protection, seller does not receive your bank details, immediate confirmation with the dealer

Disadvantages: Some shops charge a surcharge for Paypal payments (even if Paypal actually prohibits this)

Also interesting: “Increased risk potential”! Court criticizes security of popular TAN procedure

Amazon Pay

Amazon Pay is now also available as a payment service in many online shops. Anyone who has already ordered from Amazon and therefore has a customer account can simply use this to pay. When paying, buyers only have to log in with their Amazon login details and select the payment method stored – similar to Paypal. This can be the bank account or the credit card. However, paying with Amazon credit at other shops is not possible. With Amazon Pay, buyer protection (A-to-Z guarantee) is handled via the usual Amazon support.

Advantages: Registration with Amazon login data, retailer does not receive bank details, buyer protection with Amazon support

Disadvantages: Amazon can potentially track purchasing behavior

Apple Pay

Apple Pay is primarily used offline by paying at the checkout with your iPhone or Apple Watch instead of a classic card. But you can also use Apple Pay in the Safari web browser and in shopping apps, provided the respective shop offers this option. As the name suggests, Apple Pay is only available to Apple users. The prerequisite is also a current operating system, an Apple ID and a bank card issuer that supports Apple Pay – what kind most banks do.

To set up this payment method, load your debit, credit or prepaid card into your Apple Wallet. Like other payment service providers, Apple Pay does not transmit the user’s payment data to the merchant. The transaction is confirmed with Face ID, Touch ID or PIN.

Advantages: Relatively good data protection, buyer protection, seller does not receive your bank details, immediate confirmation from the dealer

Disadvantages: Can only be used with Apple products, usually requires a debit or credit card

Google Pay

This payment service from Google works very similarly to Apple Pay. The prerequisite is the Google Pay app and a credit card or a supported payment system such as PayPal. The card details are not transmitted to the retailer and, like Apple Wallet, you can store multiple cards in Google Pay.

Advantage: Buyer protection, seller does not receive your bank details, immediate confirmation from the dealer

Disadvantage: Savings banks do not support Google Pay, Google can potentially track purchasing behavior

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Instant bank transfer

Sofortüberweisung works similarly to Giropay, with the difference that the payment is processed via a third-party company, Sofortüberweisung. The company belongs to the Swedish Klarna Group. However, the process is the same. You log in with your bank details and transfer the amount due using the TAN procedure.

The advantage of instant transfer is that the seller immediately receives confirmation that the amount due has been transferred by you. The transfer itself doesn’t work any faster than paying in advance. Since the dealer will certainly receive the money, he can send the goods immediately. This means that it reaches the buyer much more quickly than is the case with advance payment. There is no buyer protection despite the transaction being processed via the Sofortüberweisung intermediary.

Advantages: Fast, easy, instant confirmation with dealer

Disadvantages: No buyer protection, banking details will be passed on to Sofort

Also interesting: Who is actually behind “Sofortüberweisung”?


Klarna also offers its own payment method, which is available in many online shops. Anyone who uses the service can choose between direct debit, credit card, instant transfer or normal transfer. It is also possible to wait until the delivery has reached the recipient before making payment. Another option that hardly any other payment service provider offers is payment in installments. However, additional fees apply. For Klarna payments, unlike Sofortüberweisung, there is buyer protection with which you can request a refund if the goods do not arrive.

Advantages: Buyer protection, payment in installments possible for a fee

Disadvantages: If payment is late, you will immediately receive a very high reminder (5 euros), there is no payment reminder


“Although there is no one “best online payment method”, there are definitely candidates that offer better conditions than others. The invoice is still a very secure payment method for buyers and is therefore still often used in Germany despite the inconvenient handling. Direct debit is also a good and secure alternative. Credit card payments are also an easy and quick way to pay and are therefore becoming increasingly popular. When it comes to payment services, Paypal is clearly ahead; it is the most used payment method for online shopping – and rightly so. Paypal offers very good buyer protection and does not pass on any bank details. Although there are competing services with similar conditions, none of them can even come close to competing with Paypal in terms of user numbers.” – Adrian Mühlroth, editor



Paydirekt is not an intermediary in the true sense, as the German banks and savings banks are behind this service. However, buyers do not directly pass on their bank details to retailers. Payment is made via your own user account.

The advantage is that retailers receive immediate confirmation of payment and can ship the goods immediately. In the event of non-delivery, the bank can also transfer the money back to the buyer’s account. It is free to use, but requires registration via online banking at the relevant bank or savings bank.

Advantages: Seller does not receive your bank details, bank can get the money back if the goods are not received, immediate payment confirmation from the dealer



Another payment service offered by German banks and savings banks is Giropay. The service redirects buyers to online banking, where the transfer is already completed. The retailer knows that the money is coming and can ship the goods.

Advantage: Fast, easy, instant confirmation with dealer

Disadvantage: The money cannot be retrieved through the bank