Digital payment providers are on the rise. While in other European countries paying at the push of a button instead of with the ball in hand...
Amounts are transferred in real-time, annoying cash and small change do not have to be lugged around and the customer has his expenses clearly arranged at a glance. In short, digital payment providers are growing for a reason. This will remain the case in the years to come. The market is currently exploding in this regard. But which digital payment providers are there and what do you have to consider if you want to use them?
The world of payment providers – a brief overview
In addition to the pioneer among digital payment providers, namely PayPal, there are many other providers that are integrated as a payment method in online shops on the Internet, among other things.
On the one hand, there are providers such as Trustly, Klarna, or Paysafecard, while on the other hand there are still classic options for paying on the Internet - such as payment via instant transfer, credit card, or direct debit.
In addition, new providers from large Internet giants, such as Apple Pay, Google Pay, or Amazon, are increasingly coming into focus.
1. PayPal as a pioneer and trailblazer
The pioneer and trailblazer among all digital payment providers are PayPal to this day. Back then, the company dared to take the unusual but now long overdue step of offering a new option for making easy, secure, and fast payments on the Internet.
This pioneering work paid off and ensured rapid growth in less than two decades.
In 2019, PayPal generated sales of more than 17 billion euros.
How PayPal works:
Uncomplicated handling
Send money to friends (only the email address is required)
Transfer money from a bank account to a PayPal account
Transfer money from PayPal account to bank account
Payment via PayPal at various online giants (Amazon, eBay, etc.)
Due to the link to the bank account, it is not absolutely necessary to top up the PayPal account
It is precisely the very easy handling that makes PayPal so popular in the online market. But the competition never sleeps.
2. Other Payment Providers
As PayPal became more and more successful, competitors in the market also ventured further and further. This includes, for example, Klarna, Trustly, or Paysafecard. Why are the alternatives interesting? Providers often have their own strengths and weaknesses. In addition, today there are no online casinos, for example, where you can pay with PayPal. The payment service provider has discontinued support. However, this does not apply to all alternatives.
The three mentioned competitors of PayPal have their peculiarities.
Trust: The digital payment provider Trustly works in a similar way to Sofortüberweisung. Ultimately, your own bank account is linked to the payment provider Trustly in order to be able to carry out transfers quickly and securely. Finally, Trustly takes care of the transfer in real-time in order to be able to process the payment process as quickly as possible.
Paysafecard: The great advantage of Paysafecard lies in a special feature that distinguishes this payment provider from others. Paysafecard can be seen as a prepaid payment card. This means that no account or credit card information has to be passed on to the company. The Paysafecard only has to be loaded online with an amount of your choice. As a result, you can pay anywhere where Paysafecard is accepted. The advantage in terms of security: the seller does not receive any relevant data about the buyer.
Klarna: Klarna is not only a digital payment provider but also a bank. Klarna works with a number of large companies, which means that users of this service can pay for their goods almost anywhere. The advantage: Because Klarna is also a bank, buyers of goods can, for example, also pay online in installments.
3. Apple Pay and Google Pay – the new generation
The traditional digital payment providers are now joined by large companies that have discovered this branch of the economy for themselves. Apple, Google, and Amazon are now active with their own digital payment methods. Here is an overview:
Google Pay: Google Pay is already available in Germany. Ultimately, the provider works similarly to PayPal. However, the difference lies in the fact that it is necessary to use a credit card that comes from a bank that Google Pay works with.
Apple Pay: Apple Pay only works on iPhones or the Apple Watch. This makes the payment service only attractive for users of these products. With Apple Pay, too, the payment service must be linked to a credit card from a bank that cooperates with Apple itself.
Ultimately, the following applies to both Apple Pay and Google Play: both ensure that quick and uncomplicated payments are now also possible with smartphones. But there are also differences. Of course, these relate primarily to the possible applications, but also affect other areas.
Amazon Pay: Works similarly to the two payment services mentioned above, but is limited online to products that can be purchased from Amazon. Amazon products can be paid for quickly and easily via the web, mobile devices, or voice instructions.
Conclusion – digital payment providers will continue to grow
Digital payment providers will continue to grow in the coming years. The way we consume goods is changing, and frugality is sexy again. Products are being purchased online more and more frequently because it is often faster than in brick-and-mortar stores, more convenient, and often cheaper.
If you feel more comfortable online without an intermediary digital payment provider, you still have the option of paying by direct debit, bank transfer, or invoice.
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