Top Payment Methods in Europe 2025: A Merchant’s Guide to Winning Online Sales

Expanding your online shop or venturing into a new market brings plenty of excitement—and a fair share of questions. Chief among them: Which payment methods in Europe do customers expect? Understanding regional preferences is critical to winning over local audiences and boosting conversions.

Europe’s e-commerce market is thriving, with revenues projected to reach US$708 billion in 2025, driven by a diverse and tech-savvy consumer base. Each country has unique preferences for online payment methods in Europe, and failing to offer the right options can lead to cart abandonment and lost sales.

This guide explores the most used payment methods in Europe for 2025, their pros and cons for merchants, and how open banking providers like Noda are sparking a payments revolution.

Why Payment Preferences Define Merchant Success

Complexity is a hallmark of the European payments landscape, with local habits often trumping global norms. Contrary to what many might expect, Europe's approach to credit card usage actually stands in stark contrast to that of the United States. But debit card penetration in many countries is significantly higher. Firstly, despite the global reach of household names like Visa and Mastercard, local payment methods in Europe like iDEAL, BLIK and Bancontact are often trusted at online checkouts. This complexity requires merchants to adopt a nuanced approach rather than applying one-size-fits-all solutions.

Secondly, Europe isn’t a monolith. Shoppers in Germany pay differently than those in Spain or the Netherlands. Offer the wrong method, and 44% will abandon their cart. Get it right, and you’ll tap into a market forecasted to reach US$900 billion by 2028.

Lastly, the regulatory environment shapes much of Europe's payment landscape. PSD2 (Payment Services Directive 2) has revolutionised payment methods in European countries, particularly driving open banking adoption and enhancing security standards. Merchants must navigate these regulations whilst capitalising on the opportunities they create.

Below, we dive into the top payment methods in Europe for 2025, focusing on online shopping trends, with insights to guide your strategy.

Snapshot: The Most Used Payment Methods in Europe 2025

*Cash on delivery is still noticeable in CEE, but overall declining.

The Six Popular Payment Methods in Europe

Digital Wallets: Quick, Secure, and on the Rise

Digital wallets are now the most used payment methods in Europe for online shopping. Roughly 44% to 53% of all e-commerce transactions involve digital wallets. Leading global players like Apple Pay, Google Pay, and others continue to expand their footprint, benefiting from increasing smartphone penetration and consumer demand for fast, secure, and convenient checkout experiences.

Pros for Merchants:

1. Faster Checkouts: Wallets streamline the payment process, reducing cart abandonment.
2. Enhanced Security: Tokenisation and encryption protect customer data.
3. Audience Appeal: Popular with 18-35 year olds, especially Gen Z, driving higher conversions.

Cons for Merchants:

1. Higher, opaque fees: While digital wallets ride on card rails, they still attract the same interchange + scheme + wallet mark-ups; hidden pass-throughs can push the real cost above, wiping out thin margins on low-ticket items.
2. Geo-restricted uptake: Apple Pay covers only certain European banks, Google Pay is the same, leaving significant pockets of shoppers unable to pay.
3. Chargeback risk remains: Digital wallets may allow consumer-initiated disputes; dispute rates run at approx. 0.4 %–0.6 %, and merchants shoulder the burden of proof.

Debit and Credit Cards: The Universal Choice

Cards (Debit, credit, and prepaid) remain a cornerstone of popular payment methods in Europe, accounting for a significant share of e-commerce transactions. Visa and Mastercard lead, particularly in the UK, where 73% of consumers prefer cards for online purchases. In France, the local card scheme Cartes Bancaires dominates, with the majority of shoppers opting for it.

Pros for Merchants:

• Global Reach: Cards are widely accepted, making them ideal for cross-border sales.
• Consumer Trust: Familiarity with Visa, Mastercard, and local schemes boosts confidence.
• Ease of Integration: Most payment gateways in Europe support card payments seamlessly.

Cons for Merchants:

• High Fees: Merchants face high transaction fees that include a percentage of the sale and a fixed cost per transaction.
• Chargeback Risks: Fraud or disputes (and associated fees) can lead to chargebacks, impacting revenue.
• Foreign Transaction Fees: Cross-border purchases incur additional fees — 1% to 3% of the — to cover currency conversion and international processing costs.
• Integration Costs: Setting up card processing requires compliance with PCI DSS standards — especially with custom or server-side integrations.

PayPal: The Online Payment Heavyweight

PayPal is a dominant force among online payment methods in Europe, accounting for 24% of e-commerce transactions in 2024. However, its adoption varies widely across the continent—while it is a must-have payment option in countries like Germany, it sees much less presence in other markets, for example Latvia, where very few websites provide PayPal buttons. This uneven adoption reflects differing consumer preferences and local payment ecosystems.

Despite this, it’s user-friendly interface and robust buyer protection make it a go-to choice for consumers across payment methods in European countries.

Pros for Merchants:

• Built-in Fraud Protection: Shifts liability for unauthorised transactions away from merchants (saving fees in dispute costs).
• Widespread Adoption: PayPal’s millions of active accounts globally ensure broad appeal, boosting conversions.
• VAT-Friendly Reporting: Consolidated transaction records that simplifies EU compliance headaches.

Cons for Merchants:

• Transaction Fees: Fees range from 2.9% - 3.40% + €0.30 per transaction, plus FX spreads.
• Unpredictable Holds: Automated risk checks can freeze 10-30% of revenue for a few days without explanation.
• Customer Disputes and Chargebacks: PayPal typically favours buyers in dispute cases, often reversing transactions—even if supporting evidence is provided, resulting in lost revenue. 

Buy Now, Pay Later (BNPL): Flexible Financing

Traditional banks built their retail profits on two pillars: credit-card interest and overdraft fees.

Buy-now-pay-later (BNPL) is kicking both pillars at once. BNPL options (like Klarna, Afterpay) are appearing frequently at checkout offering shoppers flexible purchasing power, particularly for fashion and electronics.

Here’s something striking: in 2024, eight in ten of the world’s most enthusiastic BNPL markets clustered in northwest Europe. Why? Because shoppers from Oslo to Berlin are embracing flexible payments like never before.

Pros for Merchants:

• Replaces Traditional Credit: BNPL feels “safer” because instalments are fixed and transparent, and it is especially popular with Gen Z and Millennials.
• Improved Conversions: Flexible payments reduce purchase hesitation.
• Higher Order Values: BNPL increases average order values.

Cons for Merchants:

• Regulatory Scrutiny: New Consumer Credit Directive enforces affordability checks, adding compliance costs.
• Delayed Merchant Payout: Merchants may not receive funds instantly, impacting their immediate cash flow and creating a lag in reconciliation.
• Increased Return Management Costs: As consumers may be more inclined to "try before they buy," leading to increased logistical and processing expenses for merchants.
• Higher Merchant Fees: BNPL providers typically charge merchants 3%-6% per-transaction, making it significantly more expensive than traditional card and digital wallet payments and directly impacting profit margins.
• Industry Limitations: BNPL services do not support all merchant industries, meaning certain sectors, such as travel and digital goods, may not be supported.

Local Payment Methods: Regional Champions

Local payment methods often give tough competition to international alternatives in their home markets. Understanding these preferences becomes critical for merchants targeting specific countries.

For instance: 

• Germany: While SOFORT and Giropay historically dominated the direct bank transfer space, reflecting Germans' strong preference for account-to-account payments. These methods are now being phased out, and a new contender is Wero Wallet, aiming to become a significant player in direct bank payment solutions.
• Netherlands: iDEAL, a prominent domestic brand, handles an annual transaction volume of around €141 billion. It is among the preferred payment methods locally, making it essential for any merchant targeting Dutch consumers.
• Poland: BLIK has revolutionised mobile payments, whilst Przelewy24 remains popular for e-commerce transactions.
• Nordic countries: Mobile payment solutions like Swish (Sweden) and MobilePay (Denmark) demonstrate high adoption rates.

Pros for Merchants:

• High Conversion Rates: Local methods align with consumer preferences, reducing cart abandonment.
• Wider Customer Accessibility: Merchants can cater to those customers who may not use credit cards or prefer local banking options.
• Faster Settlement Times: Direct bank-based local payment methods generally settle faster than traditional card networks, giving merchants quicker access to cash.

Cons for Merchants:

• Fragmentation: Supporting multiple local methods requires complex integrations.
• Market-Specific: Local payment methods like BLIK are irrelevant outside Poland, limiting scalability.
• Setup Costs: Adding local methods may involve upfront investment in payment gateways in Europe.

Open Banking: The Game-Changing Innovation

While wallets and cards fight for share, open banking (also labelled account-to-account or A2A) has become one the fastest-growing payment methods in Europe, unlocking benefits for both merchants and shoppers.

Europe leads the way in payment innovation, with the UK making significant strides to quickly follow suit. The European region has demonstrated a much higher adoption rate, with A2A payments accounting for 17% of the domestic e-commerce market in 2024, with the highest penetrations found in Poland and the Netherlands. In comparison, the global A2A payments market share was just 7% in 2024. This positions Europe as a leading region in leveraging direct bank transfer payments for online purchases.

Open Banking adoption has also surged in the UK, with approximately 1 out of 5 consumers and small businesses now actively using it, facilitating 31 million payments in March 2025 alone.

By October 2025, SEPA instant transfers in Euros will be cost-aligned with standard SEPA, making instant Pay by Bank far more accessible. This will drive widespread, affordable instant Pay by Bank, boosting Open Banking adoption.

Pros for Merchants:

• Reduced Processing Costs: By directly connecting banks, card network fees are bypassed, leading to lower transaction costs.
• Instant & Irreversible Settlement: Funds are settled immediately and securely, providing guaranteed payments to merchants.
• Minimised Fraud & Chargebacks: The direct payment process significantly lowers fraud incidents and virtually eliminates chargeback risks.
• Enhanced Customer Control: Customers maintain greater control over their payments, directly authorising transactions from their bank.

Cons for Merchants:

• Geographic Gaps: Open Banking's presence can still be limited in some smaller European countries.
• Developing User Familiarity: As a newer payment method, ongoing user education is necessary for broader adoption and consumer comfort.

Bottom Line:

Open banking is already mainstream in some regions: The UK, Netherlands, and Nordics have blazed a trail, and instant pay-by-bank is now expanding rapidly across Europe.

Meet Noda: Your Open Banking Partner in Europe

For online merchants wanting to conquer Europe’s vibrant e-commerce market, Noda is your trusted partner, weaving together the best of open banking and seamless payment solutions. As a leading payment gateway in Europe, Noda empowers you to offer the most popular payment methods in Europe—from direct bank transfers to digital wallets—while keeping costs low and conversions high.

With a single integration, Noda connects you to over 2,000 banks across 28 countries, ensuring your customers can pay the way they love, whether in Germany, the UK, or beyond. Here’s why Noda is the key to unlocking your European success.

Key Features Merchants Love About Noda

• Seamless Connections Across Europe: With one elegant API, Noda links your shop to 2,000+ banks across 28 European countries. No need for multiple integrations—Noda brings Europe to your checkout.
• Whisper-Low Fees: Noda’s transaction fees start at just 0.1%—that’s only 10p for every £100 processed. Compare that to card fees of 2.4%, and on £100,000 in monthly sales, you could save £2,300, leaving more for your business to flourish.
• Instant Funds, Instant Freedom: Noda’s direct bank transfers deliver funds to your account in seconds, giving you the cash flow to grow without delay.
• Effortless Setup, Beautiful Integration: Noda offers four plug-and-play plugins for quick setup—WooCommerce, Magento, PrestaShop, and OpenCart. Prefer a custom checkout? Noda’s APIs make integration a breeze, often ready in minutes.
• Versatile Payment Options: Blend open banking with cards, Apple Pay, and Google Pay to capture every customer preference, ensuring no sale slips through the cracks.
• No-Code Simplicity: For smaller merchants or those without a website, Noda lets you send instant payment links, so you can collect direct bank transfers instantly—perfect for startups or pop-up shops.

** For UK merchants with physical stores, Noda also offers QR code payments for quick, contactless transactions for just 20p per payment.

• Tailored Support: Noda’s dedicated account managers guide you through setup and beyond, offering insights to boost your conversions and keep your business running smoothly.
• Secure and Compliant: Built with PSD2 and GDPR in mind, Noda’s strong customer authentication ensures every transaction is safe, giving you and your customers peace of mind.
• Conversion-Driven Design: Noda’s sleek, localised interfaces make checkouts feel effortless, especially on mobile, turning browsers into buyers.

Looking to offer the top payment methods in Europe without the complexity? See how Noda puts them into your checkout with a single integration. 

Get in touch with Noda today!