The Electronic Payment Standard (EPS) is a digital transfer payment method primarily used in Austria. EPS lets customers make payments or transfer funds from their bank accounts using their bank’s online banking interface, which uses the bank’s security protocols. Established in 2001 as a joint initiative by the Austrian government and Austrian banks, EPS facilitates secure and efficient online transactions.

The system is straightforward and user-friendly. When a customer selects EPS as their payment method at checkout, they are redirected to their bank’s online banking page. Then they can authorise the payment, which is processed in real time – providing the customer and business instant payment confirmation.

EPS’s integration with Austria’s banks means it has widespread acceptance among Austrians, making it a preferred method for online shopping. In 2024, the domestic account-to-account scheme EPS captured an estimated 20% share of total e-commerce payment volume. EPS’s high adoption rate makes it a strong choice for businesses that want to cater to the Austrian market.

For businesses considering integrating EPS with their payment options, there are several aspects to consider. These include understanding the setup process, transaction fees, and technical requirements. The integration process typically involves co-ordinating with a payment service provider that supports EPS transactions, which ensures the payment gateway on the business’s website can handle EPS payments.

Additionally, EPS has started expanding its services to support cross-border transactions, allowing Austrian customers to use EPS for payments in select foreign online stores. This expansion is part of a broader trend in which local payment methods are increasingly supporting international transactions, reflecting the global nature of ecommerce.

Below, we’ll cover what you should know about EPS, including how it works, the technical integration process, and key considerations for businesses that want to implement EPS as part of their payment solutions.

What's in this article?

• Where is EPS used?
  
• Who uses EPS?
  
• How EPS works
  
• Business benefits of accepting EPS
  
• EPS costs and fees
  
• EPS security measures
  
• Requirements for businesses to start accepting EPS payments
  
• Alternatives to EPS
  
• How Stripe Payments can help
  

Where is EPS used?

EPS is a major player in Austria, where more than 11,000 of the country’s online businesses accept the payment method. But its reach extends beyond Austria, with growing adoption in other European countries. Here’s a more detailed look at the geographical landscape of EPS usage and its reflection of broader market trends:

Austria

In Austria, EPS is deeply embedded in the online payment system. Its simple integration with Austrian bank accounts, coupled with its robust security and convenience, has won over Austrians. This widespread adoption is further fuelled by:

• Customers' strong preference for debit: Austrians traditionally favour debit cards over credit cards, making EPS a natural choice for online transactions.

• High internet banking penetration: Online banking is common in Austria, which creates a readily available platform for EPS access.

• Business support: Major Austrian online retailers and platforms are fully integrated with EPS for a smooth checkout experience.

This dominance of EPS in Austria reflects a market in which customers increasingly prefer online payments while prioritising security and convenience. Additionally, the established infrastructure of online banking and a preference for debit usage contribute to EPS’s success.

Expanding its footprint beyond Austria

Although Austria remains its core market, EPS is steadily gaining traction in other European countries. Several factors are contributing to this expansion:

• Similar customer preferences: Growing comfort with online payments and a preference for debit cards are evident in other European markets, making EPS a viable option.

• Cross-border e-commerce: The rise of online shopping across borders creates opportunities for EPS to expand its reach.

• Business partnerships: Leading international payment gateways and e-commerce platforms are integrating EPS, facilitating its acceptance beyond its home country.

This growth reflects a broader European trend towards digitalisation and the increasing popularity of online payments. Customers are becoming more comfortable with online transactions, and businesses are recognising the need to cater to these evolving preferences.

Regulatory landscape

The regulatory environment in Europe plays an important role in shaping the online payment landscape. Initiatives such as the revised Payment Services Directive (PSD2) aim to increase transparency and competition in the payment industry, benefiting solutions such as EPS.

PSD2's focus on open banking and strong authentication protocols aligns with the core principles of EPS, further supporting its growth and encouraging the development of innovative payment solutions.

Who uses EPS?

While EPS boasts widespread use in Austria, its appeal extends to specific customer segments and business types.

Customers

• Young adults: This tech-savvy demographic embraces online shopping and prefers convenient, secure payment options. EPS fits this group’s needs, offering instant transactions and eliminating the need for physical credit cards.

• Security-conscious customers: For people who prioritise security and privacy online, EPS’s integration with trusted bank accounts and robust authentication protocols offer a secure payment experience.

• Online shoppers: Whether buying clothes, electronics or food, online shoppers value a simple checkout process. EPS's integration with major online retailers simplifies the payment process, improving the overall shopping experience.

• Debit card users: In countries where customers prefer debit cards over credit cards, EPS is a natural choice for online transactions.

Businesses

• Online retailers: From established brands to small businesses, online retailers rely on efficient and secure payment solutions. EPS provides a cost-effective way to accept payments, with lower transaction fees compared to credit cards.

• Subscription-based businesses: Services such as streaming platforms and recurring subscriptions benefit from EPS's ability to automate payments from bank accounts. This allows for consistent revenue flow and reduces failed payments.

• E-commerce platforms: Platforms such as online marketplaces must cater to diverse customer preferences for payment methods. EPS adds a secure and user-friendly option for customers.

• Businesses with international customers: As online shopping increasingly transcends borders, businesses should consider accepting payments from international payment methods. With its growing presence in Europe, EPS allows businesses to cater to customers from a large geographic area.

Specific use cases

• Micropayments: For online services with smaller transaction values, EPS offers a cost-effective solution because of its lower transaction fees compared with credit cards.

• Bill payments: EPS facilitates online bill payment by allowing customers to pay bills directly from their accounts without the need for paper cheques.

• In-app purchases: Mobile apps are increasingly adopting EPS as a payment method for in-app purchases. The convenience and security of instant bank account connections make it a user-friendly option for app users.

• Online donations: EPS provides a convenient and secure way for donors to make online contributions to charities and nonprofit organisations.

Factors that influence the usage of EPS

• Demographic trends: A growing tech-savvy population and increase in online shopping habits favour the adoption of convenient online payment solutions, such as EPS.

• Regulatory environment: Initiatives such as PSD2 promote open banking and secure online payments, creating a favourable environment for EPS.

• Customer preferences: A shift towards debit card usage and a growing emphasis on security and privacy contribute to the popularity of EPS among customers.

• Business needs: Businesses are constantly seeking cost-effective and efficient ways to accept payments online. EPS caters to these needs with its low transaction fees and secure payment infrastructure.

How EPS works

EPS's diverse functionalities, which include integrated cross-border transactions, secure escrow services and data-driven insights, allow businesses to enhance their online operations and expand their reach to international customers. Here's how it works:

• Easy payment processing: Businesses can accept payments instantly through QR codes or online integration to minimise friction at checkout and improve conversion rates. By processing transactions in a range of currencies, businesses can serve international customers better and expand their market reach.

• Cross-border commerce: Businesses can receive payments from overseas customers without currency exchange concerns because of automatic currency conversion. This allows businesses to simplify cross-border transactions and tap into new international markets.

• Enhanced trust with escrow: Through EPS, businesses can offer escrow services to hold payments in a secure escrow account until the customer has confirmed receipt and satisfaction with the goods or services. This builds trust and confidence with customers, which can lead to higher sales and foster customer loyalty.

• Streamlined integration: Businesses can integrate EPS effortlessly with popular ecommerce platforms such as Shopify and WooCommerce for a smooth checkout experience.

• Engaging mini-programmes: Businesses can develop customised mini-programmes within the EPS app, creating a dedicated space to offer services, sell products and engage with customers. Interactive content and personalised experiences help foster brand awareness, drive customer engagement and increase sales.

• Data-driven insights: Businesses can gain valuable insights into customer behaviour and preferences through comprehensive analytics tools powered by EPS. Data-driven insights allow businesses to make informed decisions about product offerings, marketing strategies and business expansion.

• Tailored financial solutions: Businesses can access a range of financial services such as loans and insurance through EPS partnerships, which are designed to meet specific business needs and financial goals. Convenient solutions integrated within the EPS system can help businesses secure financing and manage finances effectively.

• Convenience of mobile wallets: Businesses can offer contactless payments through the EPS digital wallet in physical stores, providing customers with a fast and convenient checkout experience. This reduces waiting times, boosts customer satisfaction and improves operational efficiency.

• Secure and transparent transactions: Businesses can guarantee safe and reliable transactions with robust security measures, including multilayered authentication protocols and advanced encryption technology. Businesses and customers receive clear confirmation of all transaction details for improved transparency and control.

Beyond functionality

Although these functions are central to EPS’s business-oriented features, the platform is constantly evolving and investing in improvements, focusing on areas such as:

• Enhancing cross-border e-commerce capabilities to facilitate smooth international trade and transactions and expand market opportunities for businesses

• Expanding financial integrations to offer a more comprehensive suite of financial services for businesses and cater to diverse needs

• Developing advanced analytics tools to provide deeper insights and AI-driven solutions for effective customer engagement and business optimisation

How EPS works for customers

• Choosing EPS at checkout: When shopping online, Austrian customers select EPS as their payment method on the checkout page of a business's website.

• Customers select their bank: Customers are then redirected to a page where they choose their bank from a list of Austrian banks.

• Secure login to online banking: Customers log in to their online banking portal using their standard credentials. This step ensures that the payment process is secure.

• Transaction review and authorisation: Once logged in, customers review the payment details prefilled by the business, including the amount and recipient. They authorise the payment, often with an additional secure step such as a transaction authentication number (TAN).

• Confirmation and redirect: After authorising the payment, customers are redirected to the business's website, where they receive confirmation that the transaction was successful.

Business benefits of accepting EPS

Direct bank transfers

• Guaranteed payments: Unlike credit cards, EPS transactions are direct bank transfers. Once completed, the payment is guaranteed, significantly reducing the risk of chargebacks.

• Familiarity for customers: Austrians are familiar with bank transfers as a traditional payment method, which makes EPS a preferred choice for many.

Local market appeal

• Tailored for Austrian market: EPS is specifically designed for the Austrian market.

• Linguistic and cultural alignment: The system is in German and culturally aligned with Austrian customer habits.

Enhanced customer data security

• No handling of sensitive data: Because the payment process is managed through the customer's bank, businesses don't handle sensitive financial data, which reduces the burden of complying with stringent data security regulations.
  

Competitive differentiation

• Niche market advantage: By offering EPS, businesses can differentiate themselves, especially in niche markets where customers strongly prefer local payment solutions.

• Enhanced business-to-business (B2B) transactions: For businesses that work with other Austrian businesses, EPS can streamline the payment process by aligning with the country's common financial practices.

Tapping into the Austrian market

• Unmatched reach: With 80% of online shoppers in Austria using EPS, integrating this payment method grants businesses access to a large, loyal customer base.

• Enhanced brand reputation: Demonstrating a commitment to local preferences by offering EPS can build trust and strengthen a brand's reputation in the Austrian market.

Smooth cross-border transactions

• Effortless international expansion: Accepting EPS simplifies cross-border transactions through instant currency conversion and secure payment transfers, allowing businesses to expand their reach and serve international customers easily.

• Reduced operational costs: By eliminating complex cross-border payment processing procedures, EPS saves businesses time and resources, allowing them to focus on core business activities.

Building trust and confidence

• Multilayered security: EPS employs advanced security measures, including encryption and real-time monitoring, to protect businesses against fraud and unauthorised transactions, guaranteeing a safe and reliable payment experience.
  

Data-driven insights for informed decisions

• Comprehensive customer analytics: EPS provides valuable insights into customer behaviour and preferences, empowering businesses to make data-driven decisions about product offerings, marketing strategies and operational adjustments.

• Tailored marketing campaigns: Businesses can use customer data to create targeted marketing campaigns that resonate, boosting engagement and conversion rates.

Embracing innovation

• Future-proof technology: EPS invests in innovation and develops features that adapt to the evolving world of online payments, ensuring that businesses can remain at the forefront of the industry.

• Open banking: EPS's commitment to open banking enables deeper integration with financial services, providing businesses with access to a wider range of solutions and functionalities.

EPS costs and fees

Transaction fees

• Standard transaction fee: Businesses pay a fixed percentage on each successful transaction. This rate varies depending on the business category and transaction volume. For example, the standard fee for ecommerce transactions typically is 0.4% to 0.8%.

• Minimum transaction fee: Regardless of the transaction amount, a minimum fee per transaction applies. That fee typically is 0.05 euros to 0.10 euros.

• Cross-border transaction fee: When processing payments from international customers, an additional fee is applied to cover currency conversion and cross-border transfer costs. This fee typically is 0.15% to 0.25%.

Integration costs

• Initial setup fee: Businesses may need to pay a one-time fee to set up a business account and integrate EPS with their platform or website. This fee typically depends on the integration method and complexity of the setup process.

• Monthly maintenance fee: Some EPS plans include a fixed monthly maintenance fee to cover technical support and system maintenance. The fee depends on the plan and service agreement.

Additional services

• Escrow service fee: If a business chooses to offer escrow services for their transactions, they must pay an additional fee, which varies depending on the transaction value but typically is 0.5% to 1.5%.

• Chargeback fees: If businesses encounter fraudulent or disputed transactions, they may need to pay a fee to cover the investigation and potential chargeback costs. This fee can vary depending on the chargeback.

• Digital wallet fee: Businesses that integrate the EPS digital wallet for in-store payments may need to pay a transaction fee, which is typically lower than the standard transaction fee for online transactions.

Fee transparency

EPS provides transparent and easily accessible information about its fees and charges. The service also offers different support channels to answer questions about fees and billing.

• Alternative pricing models: EPS offers variable pricing models tailored to business needs and transaction volume. These models can include:

• Volume-based discounts: Businesses may qualify for discounted transaction fees as their transaction volume increases.

• Subscription plans: Fixed monthly subscriptions offer bundled services and discounted fees for high-volume businesses.

• Custom pricing agreements: For large enterprises or unique business models, EPS can provide tailored pricing agreements to meet requirements.

EPS security measures

Authentication mechanisms

• Multi-factor authentication (MFA): EPS employs a robust MFA system that requires at least two independent factors for user verification. This typically involves a combination of password, personal identification number (PIN), TAN and/or biometric authentication (fingerprint or facial recognition).

• Strong password requirements: EPS enforces stringent password criteria, including a minimum length, character complexity and regular password updates. This significantly reduces the risk of brute-force attacks and dictionary cracking.

• One-time passwords (OTPs): For added security, EPS offers optional OTPs sent via SMS or mobile app notifications. These temporary codes expire after a short time to minimise the risk of unauthorised access.

• Biometric authentication: For some transactions, EPS integrates with mobile banking apps that use fingerprint or facial recognition for secure and convenient user verification.

Data protection and encryption

• End-to-end data encryption: All sensitive data, including user information and transaction details, is encrypted in transit and at rest using industry-standard encryption algorithms, such as Advanced Encryption Standard (AES) 256. Even if data is intercepted, it remains unreadable without the decryption key.

• Tokenisation: EPS also uses tokenisation technology to replace sensitive card numbers with unique tokens during online transactions. This minimises the risk of data breaches and protects sensitive information.

• Secure communication protocols: All communications between customers, businesses and banks are encrypted using secure protocols, such as Hypertext Transfer Protocol Secure (HTTPS) and Transport Layer Security (TLS). This protects data from eavesdropping and tampering during transmission.

Fraud detection and prevention

• Advanced monitoring systems: EPS employs sophisticated real-time monitoring systems that analyse transaction patterns and identify anomalies. These systems use machine learning and data analytics to detect suspicious activity and prevent fraudulent transactions.

• Risk scoring: EPS assigns risk scores to each transaction based on various factors, including transaction value, user location and historical data. This allows the service to prioritise higher-risk transactions for further verification.

• Transaction limits: The system sets limits on the number of transactions a user can perform within a specific time frame. This helps prevent automated attacks and curb suspicious activity.

• Chargeback protection: After a fraudulent transaction, EPS offers comprehensive chargeback protection to help businesses recover their funds.

• Secure banking integration: EPS works with Austrian banks to ensure that all transactions are processed through their secure online banking portals. These portals employ strong security measures, including MFA and data encryption, further protecting user information.

• Direct bank account access: By enabling direct access to bank accounts through open banking application programming interfaces (APIs), EPS eliminates the need for users to store sensitive card information within the EPS platform. This reduces the potential for data breaches.

Continuous security audits and vulnerability management

• Regular penetration testing: EPS undergoes regular penetration testing by independent security experts to identify and address potential vulnerabilities. This proactive approach helps prevent security breaches and maintain high levels of security.

• Security incident response plan: The payment method has comprehensive security incident response plans to deal with security incidents effectively, minimise damage and restore normal operations quickly.

• Bug bounty programmes: EPS actively participates in bug bounty programmes to incentivise security researchers to identify and report vulnerabilities in their systems. This helps to address potential security flaws before malicious actors can exploit them.

Requirements for businesses to start accepting EPS payments

Here's a rundown of the requirements and process to begin accepting EPS payments:

Requirements for foreign businesses

• Legal documentation: You must provide documentation proving your business's legal existence and good standing in your country.

• European subsidiary or representative: Consider setting up a subsidiary or appointing a representative within the European Economic Area (EEA) to facilitate EPS integration and comply with regulations.

• Tax and regulatory compliance: Understand and comply with the tax regulations and financial reporting requirements that apply to foreign businesses operating in Austria.

• PSD2 compliance: Adhere to PSD2 regulations for strong customer authentication and secure online payments.

• Additional regulatory compliance: Implement Anti-Money Laundering (AML) procedures and Know Your Customer (KYC) processes to remain in compliance with local and European protocols.

• Data protection and privacy: Comply with the European Union's General Data Protection Regulation (GDPR) for data protection and user privacy.

Requirements for Austrian businesses

• Valid Austrian business registration: Your business must be legally registered and operating in Austria.

• Tax identification number: Obtain and maintain a valid Austrian tax identification number.

• Merchant account: Open a merchant account with an Austrian bank that partners with EPS. This facilitates the transfer of funds in EPS transactions.

• Merchant agreement: Sign a merchant agreement with EPS outlining your obligations and responsibilities as a payment processor.

• PCI DSS and GDPR compliance: Ensure that your website and systems comply with Payment Card Industry Data Security Standard (PCI DSS) and GDPR rules.

Accepting EPS payments with Stripe

Integrating EPS through Stripe involves these steps:

• Stripe account: Create a Stripe account and complete KYC verification.

• Stripe Connect: Enable Stripe Connect to integrate EPS and other payment methods into your online platform.

• Technical integration: Configure Stripe to accept EPS payments and ensure secure data exchange. This may involve integrating the EPS API or using Stripe's pre-built components, such as Checkout and Elements.

• Testing and activation: Test your EPS integration thoroughly to make sure the transaction process works smoothly before launching it live.

• Currency conversion: Check that your Stripe account supports the euro (EUR) for processing EPS payments.

• Ongoing compliance and security: Maintain PCI DSS and GDPR compliance, implement strong security practices and stay up to date with shifting regulations.

Alternatives to EPS

While EPS enjoys a dominant role in Austria, it faces competition from several alternative payment methods, including:

Giropay

• Functionality: Similar to EPS, this service offers online bank transfers from a customer's account.

• Market share: Widely used in Germany and gaining traction in Austria, although still trailing EPS in that country.

• Strengths: Secure, convenient and familiar to German and Austrian customers.

• Weaknesses: Less prevalent than EPS in Austria, potentially limiting reach for some businesses.

Sofortüberweisung

• Functionality: Another online bank transfer solution with similar functionality to EPS.

• Market share: Popular in Germany and Austria but used less widely than EPS.

• Strengths: Fast and convenient.

• Weaknesses: Not as widely accepted as EPS, potentially affecting conversion rates.

PayPal

• Functionality: A global online payment solution with numerous features, including customer and seller protection, PayPal boasts widespread use and brand recognition.

• Market share: Recognised internationally with a significant user base in Austria.

• Strengths: Convenient for international transactions and offers customer protection.

• Weaknesses: Higher transaction fees compared with EPS, potentially discouraging some smaller businesses.

Digital wallets

• Functionality: Offer contactless payments and peer-to-peer transfers, similar to EPS digital wallets.

• Market share: Rising in popularity, especially among younger generations.

• Strengths: Convenient and secure, offering a modern payment experience.

• Weaknesses: Still evolving and fragmented, with various players competing for market share.

Credit and debit cards

• Functionality: Widely accepted, offering a nearly ubiquitous payment method for customers.

• Market share: Still prevalent in Austria, although facing competition from online payment options.

• Strengths: Convenient and familiar, offering a readily available payment method.

• Weaknesses: Higher transaction fees compared with EPS, potentially affecting profit margins.

Cash on delivery

• Functionality: Offers payment upon delivery of goods.

• Market share: Still used for certain segments, especially physical goods.

• Strengths: Provides peace of mind for customers who prefer not to pay online.

• Weaknesses: Can be inconvenient and logistically challenging for businesses.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments or get started today.