Purchase on Invoice
In Germany, purchase on invoice is the most popular payment method in the online medium. Customers are happy to pay through invoice; it offers them an option to postpone payment for a few days and grants them security. Especially for first-time orders or in stores without a rating system yet, invoice payment remains a decisive criterion for many customers in making their purchase decision. If customers need to pay in advance, they worry if they would not receive their goods or be stuck with costs paying for defective products. Purchase on invoice payment method allays these fears. It allows customers to receive goods, inspect them and then make a payment.
Higher administrative costs for the retailer
Shoppers decide whether to purchase or not depending on the availability of invoice payment options. The invoice payment requires increased administrative effort compared to automated payment methods like Paypal. However, payment defaults occur more frequently with invoice payment leading to more administrative efforts. In case of payment defaults, the incoming payments should be checked manually, and outstanding payments need to be sent a reminder. Small merchants may experience liquidity problems if too many invoices remain unpaid.
Protection against non-payment and fraud
As customers continually seek payment methods like invoices, eCommerce store owners try to integrate as many payment options as possible in their store. In case of payment defaults, the merchants can rely on the payment service provider for fraud prevention in advance. Also, collection services can be employed, so the risk factor for merchants remains low while the customer’s acceptance level increases.
