Is Segpay a good payment processor

Online payment systems explained

At 34%, the most popular payment method on the net is now using an online payment service such as PayPal. In recent years, they have overtaken payment on account, which only accounts for about 27%. The places behind it occupy direct debit or credit card.

If you choose an online payment system, there are different methods:

  1. You pay for your purchase through the service provider. He transfers the amount due to the shop and later withdraws this amount from your current account or he debits the stored credit card.
  2. You use the service provider and use it to log into your online banking. In this case, the purchase price will be debited directly from your checking account.
  3. You load a prepaid credit card and deposit it in a payment system. You can use the credit to make purchases at participating shops.

Payment systems often free of charge

Most online payment systems can be used free of charge. Services such as PayPal charge transaction fees from participating merchants in order to keep the offer free for private customers. With some providers, such as Wirecard, you have to pay to top up prepaid credit cards. Additional services such as transfers to others are usually associated with costs for online payment services.

Online payment systems in Germany

In the following, we will introduce you to eight online payment systems commonly used in Germany.

PayPal

PayPal is a payment system owned by ebay. Customers first open a PayPal account in which they either store their bank details or a credit card. PayPal can be used to pay for purchases in online shops or for transfers. When you shop online with PayPal, you will first be redirected to the PayPal payment page. There you log in with your access data and confirm the purchase. The payment provider then transfers the amount immediately to the merchant's PayPal account or bank account. The amount will then be withdrawn from your current account or, alternatively, the deposited credit card will be charged.

In some online shops, a PayPal express payment is also possible. In this case, all billing data and the address will be taken from your PayPal account and you do not have to enter this information separately in the shop. The purchase can then be completed more quickly.

advantagesdisadvantage
  • Very widespread worldwide
  • No transfer of bank or credit card details to online retailers
  • Secure data transfer
  • The payment system can also be used for online transfers
  • PayPal account for private users free of charge
  • Phishing attacks possible
  • After password theft, purchases are possible without bank details
  • No additional security through a TAN system
  • Data is on servers in the USA

Click & Buy

The Click & Buy system is 100 percent owned by Deutsche Telekom AG. The way it works is similar to PayPal. First you create your own account and store your bank details, a credit card or both. When you shop in an online shop, you will be redirected to the Click & Buy website to process the purchase. There you log in with your access data and confirm the purchase.

The payment service provider transfers the amount directly to the online shop and later withdraws the money from your bank account or debits the stored credit card with the invoice amount.

advantagesdisadvantage
  • Relatively high distribution in Germany
  • No transfer of bank or credit card details to online retailers
  • Certified by the Federal Office for Information Security
  • Data is stored on servers in Germany
  • Account free for private users
  • Lack of additional security features such as TANs
  • Phishing attacks possible
  • Fees for transfers back to the cash account

Skrill (formerly Moneybookers)

The Skrill payment system comes from England and was originally called "Moneybookers". In order to use Skrill, you must first create your own customer account. There you can add money with a credit card or your current account. Later you have the option of using the prepaid credit from Skrill for purchases on the Internet or for online services. If you wish, you can apply for a Skrill prepaid MasterCard, which you can also use to withdraw money from your Skrill account at ATMs.

In addition to the option of paying online with Skrill, you can also use the account for transfers. The recipient does not need to have a Skrill account for this.

advantagesdisadvantage
  • No transfer of bank or credit card details to online retailers
  • Prepaid system offers additional security against excessive expenses
  • Transfers to other customers possible
  • Standard account for private users free of charge
  • It is not possible to cancel transfers
  • Relatively low distribution in Germany
  • Additional security systems such as e-tokens are only possible for verified accounts
  • Phishing attacks possible
  • Additional services are chargeable

Giropay

Giropay was developed by the German banking industry so that consumers can make secure online purchases without a credit card. The system is supported by Sparkassen, Postbank, Volksbank and Raiffeisenbank, among others. No separate account is required to use Giropay. All you have to do is use online banking and legitimize your current account for Giropay. When you shop online with Giropay, you will be redirected directly from the online merchant's website via a secure connection to your bank's online banking. From there, you can make the payment immediately using your PIN / TAN system. In this way, Giropay guarantees the merchant that he will receive the payment. For merchants, Giropay means a low risk of default.

Giropay can also be combined with other payment systems such as PayPal or Click & Buy.

advantagesdisadvantage
  • Payment processing through your own bank
  • Fast payment to the dealer
  • No separate account with an additional service provider necessary
  • Bank details are not transmitted to the online retailer
  • Phishing attacks possible
  • Greater impact after phishing attacks, as attackers can gain direct access to the checking account
  • Cannot be used for purchases in online stores from the USA or other countries

Wirecard

Wirecard's payment system was developed in Bavaria. The provider is based in Munich. Wirecard's principle is simple. First, you open an account for Wirecard. You will then receive a virtual prepaid credit card to which you can top up money. Before doing this, you have to verify your account via an SMS that the provider sends you to the stored mobile phone number.

As soon as you have loaded the credit from your checking account onto your credit card, you can use it to make online purchases as you would with a normal credit card. Transfers to other Wirecard holders are also possible. To do this, however, you need activation for the Mobile TAN procedure.

advantagesdisadvantage
  • Thanks to a virtual credit card, online purchases are also possible without a “real” credit card
  • Very high credit card acceptance
  • Protection against exceeding the limit thanks to the prepaid system
  • Transfers to other providers possible
  • High security, since after phishing there is only access to the credit
  • Fees for each transaction
  • Credit card top-up charges

Paysafecard

The Paysafecard payment system was developed in Austria. It enables you to pay for goods or services on the Internet without the need for your own account or credit card. First, buy a Paysafecard at one of the sales outlets in your area. You have the choice of buying cards for amounts between ten and 100 euros.

If you visit an online shop that accepts Paysafecard payments, you can use your cards to make online purchases. When paying, simply enter the PIN on your card. For users under the age of 18, Paysafecard offers its own card to prevent young people from buying goods that are harmful to minors on the Internet.

advantagesdisadvantage
  • Anonymous online payment is possible without specifying personal data
  • No phishing opportunities
  • No account blocking necessary if you lose your card
  • No current account required for use
  • No credit card required for use
  • No storage of personal data
  • Transactions cannot be reversed
  • Low prevalence in online shops
  • Tickets must always be purchased in sales outlets
  • You cannot top up yourself

Sofortüberweisung.de

The Sofortüberweisung.de system is operated by the Bavarian Sofort GmbH. This is a prepayment system that online banking users can use to pay directly online. No separate account is required to use Sofortüberweisung.de.

As soon as you shop at a participating online shop and select Sofortüberweisung.de, you can access your online banking directly via a secure data connection. You identify yourself with your account number and your PIN. Then confirm the purchase with a TAN. The provider confirms the payment to the dealer and the dealer releases the goods immediately, similar to the prepayment method.

advantagesdisadvantage
  • No separate account required
  • Simple process
  • Fast payment processing
  • Relatively high distribution in Germany
  • No credit card required for online purchases
  • User reveals sensitive account data to another service provider
  • Risk of phishing attacks
  • Every transaction harbors another risk for data protection
  • Provider calls up the account balance and other data on account coverage

Paydirect

Paydirekt is an online payment system that was developed by German savings banks and Raiffeisen-Volksbanken and in which many other banks are now participating. The prerequisite for using Paydirekt is that you use online banking and your bank participates in the system. Register for the Paydirekt payment system via your online banking portal. You can then pay for your online purchases via Paydirekt.

If the merchant supports Paydirekt, you will be redirected to the Paydirekt page when shopping. You then only have to make the purchase with a username and password. After confirming the purchase with a TAN, the amount due will then be debited from your account.

advantagesdisadvantage
  • No third party payment required
  • Sensitive data remains with the bank and with the user
  • Fast setup
  • Fast transaction
  • No credit card required
  • Relatively low distribution in online shops
  • Phishing attacks possible

Security and Risks

Paying on the Internet nowadays always harbors the risk of data being lost. For example, if you store your credit card details with an online retailer, you have to trust the retailer to protect this data from unauthorized access.

If you choose a third-party provider, your payment details will be on their servers and you will not have direct access to them. Here, too, you have to trust the provider in terms of data security. If you do not have this confidence, you can rely on payment systems that work with prepaid credit cards. This will reduce the risk of data theft.

In general, it is recommended that you do not give your passwords to strangers. It is best if only you know your access data for online payment systems. It is important that you change your passwords regularly to prevent misuse. In addition, you should not choose the password too easily.

In addition, make sure that the data connection during the payment process is encrypted by an https connection. You can recognize this security device if there is an https: // in front of the Internet address of the payment page.

Are there any risks when using online payment systems?

Internet-based payment systems involve numerous risks. The greatest risk is data theft. If your data is taken over by criminals, access to some payment systems such as PayPal is sufficient to pay for online purchases immediately. Since some systems do not allow for cancellation, it is difficult for consumers to get their money after a data theft.

If you choose a third-party provider for online payments, the risk also depends on the seriousness of the provider and the protection of your data by this provider. At the same time, online payment systems carry the risk that consumers lose track of their payments, as the amounts can be debited from different cards and are not booked on the same day.

The real thing: what if money was illegally debited?

If you discover that money has been illegally debited from your account, you can file a so-called direct debit objection. If you use online banking, the objection can be made directly over the Internet. You simply select the relevant booking and object to the debit from your account. With some providers such as Click & Buy or PayPal you can also cancel purchases and have the money credited back to your account.

If you discover an unlawful debit by a retailer, you can also ask them directly by e-mail or by calling them to charge you back. If there are any withdrawals that you think are suspicious, it is best to contact your bank straight away. In the event of a phishing attack, the bank can immediately take the appropriate steps and block your account.

Partly coverage through household insurance

Some home insurance policies offer protection against phishing attacks and reimburse you in the event of financial loss. It is best to find out about the conditions with your insurance company.

Mobile payment special case?

Mobile payments are payment systems that require a smartphone or tablet. In order to carry out a successful transaction via the mobile device, a stable cellular connection or a mobile internet connection is required. In principle, mobile payment does not belong to the Internet payment system, as this payment method is mainly intended for purchases in shops or for paying in restaurants.