Located in the heart of Europe, Austria wields considerable economic influence, effectively connecting the eastern, central and western regions of the continent through trade. In Austria – a country with a longstanding reputation for financial stability – traditional banking co-exists with innovative payment technologies.

The Austrian market also leans heavily on its strong and trusted banking institutions, which play a pivotal role in influencing its payment behaviours. This guide provides an overview of Austria's payment ecosystem, with a focus on what businesses seeking to expand in the country should keep in mind. This includes:

• Accepting a range of payments
  
• Optimising operations
  
• Listening to local needs
  

The state of the market

Central to Austria's financial sector are its big commercial banks: Erste Group Bank AG, Raiffeisen Bank International AG and UniCredit Bank Austria AG – the last of which is a member of the UniCredit Group and able to leverage its pan-European network.

The use of non-traditional payment methods and fintech solutions has accelerated in the country, particularly in urban centres such as Vienna. As a member of the European Union (EU), Austria complies with directives such as the revised Payment Services Directive (PSD2) and the General Data Protection Regulation (GDPR). These directives ensure payment providers maintain stringent security standards and that customers' data is protected. Austria's participation in the Single Euro Payments Area (SEPA) streamlines its cross-border transactions within the EU, benefitting both businesses and customers.

Austria's regulatory environment is complex. The government recognises the importance of electronic transactions in promoting transparency and curbing illicit financial activities, but when the EU sought to limit cash payments to €10,000, the Austrian government pushed back, and the chancellor announced plans to enshrine the right to pay with cash in the country's constitution. There's also a regulatory emphasis on promoting digital literacy and ensuring businesses are equipped to handle electronic payments.

Payment methods

Austrians use multiple modes of payment, and occasionally display a preference for more traditional methods such as banknotes and coins. However, like many of its peer economies in Europe, Austria is swiftly adapting more technologically advanced – and convenient – payment options.

Current usage

Austrians have a strong affinity for cash: according to the European Central Bank, 70% of in-store payments were made using cash in 2022. However, only 52% of transaction value came from cash payments, indicating cash is primarily used for smaller, everyday expenses.

Austrians have also embraced digital financial management. Amongst those with internet access, an estimated 72% conducted online banking in 2019.

Austrians use credit and debit cards, as well, with cards accounting for 34% of point-of-sale (POS) transaction value in 2022, according to the European Central Bank. Austrians also made a record number of card payments in 2024, worth a total of approximately 81 billion euros. But whilst credit cards have grown in popularity, debit cards continue to be used more prevalently in the country – a preference that is common in many other European nations.

Popular B2C payment methods in Austria

• Cash
  
• Debit cards (and credit cards to a lesser extent)
  
• Digital wallets such as Apple Pay, Google Pay and local option Bluecode
  

Popular B2B payment methods in Austria

• Debit and credit cards
  
• Bank transfers
  
• Cash
  

Emerging trends

Mobile wallet use is on the rise in Austria. Data from the Austrian National Bank (Oesterreichische Nationalbank or OeNB) revealed that in 2024, 95% of debit card transactions at points of sale were conducted using contactless methods.

Innovations such as contactless payments, mobile banking and digital wallets are shifting the relationship Austrians have with cash. The percentage of Austrians who own a smartphone is growing every year, with a 2019 survey finding that nine out of ten respondents never left home without one. Correspondingly, mobile payments have increased. A 2023 survey found that 20% of Austrian retailers accepted digital wallets such as Apple Pay and Google Pay – a major increase from just 4% in 2018.

Ease and friction of entry

Entering a new foreign market means considering a series of business realities. Here are some things businesses expanding into Austria need to consider about taxes, disputed charges and international payments.

Taxes

Value-added tax (VAT) is an important aspect of the Austrian financial system that affects both customers and businesses. Most goods and services in Austria carry a standard VAT rate of 20%. Whilst the immediate cost is borne by the customer, the onus for collecting this tax and paying it to the government is on the business. Missteps in VAT collection or remittance can lead to financial penalties. Both customers and businesses need to be mindful of VAT, as any discrepancies can lead to scrutiny from tax authorities as well as legal issues.

Chargebacks and disputes

Austria's policies on chargebacks and disputes lean towards consumer protection whilst keeping the market fair and competitive for businesses. With European regulations setting the broader framework, Austria's internal institutions fine-tune the process to reflect the country's values and economic goals.

International payments

Austria's economy is deeply intertwined with those of other nations, especially its European neighbours, and its business and tourism-friendly environment means its businesses frequently need to accept or send international payments. Here are some considerations to keep in mind.

• SEPA
  As a member of the EU, Austria belongs to the SEPA zone, which includes 36 countries and allows for quick credit transfers throughout Europe. Austria conducts roughly 30% of its international trade with its next-door neighbour, Germany, which is greatly facilitated by SEPA payments.

• Currency conversion
  Several third-party payment options have made currency conversion in Austria more streamlined, including Bluecode, Wise (formerly TransferWise) and Revolut. Austrians can use these kinds of solutions to get better rates and lower fees on transactions that don't involve euros, especially for online shopping.

• International trade
  Several of the country's significant trade partners and immediate neighbours do not use the euro, including Switzerland (the Swiss franc); the Czech Republic (the koruna or crown); and Hungary (the forint). Residents of these and other non-eurozone countries – both in and outside the continent – frequently conduct transactions in Austria. This means Austrian businesses should be prepared to accept a variety of currencies, offer currency conversion or support alternate payment methods.

Security and privacy

As a member of the EU and the eurozone, Austria prioritises payment security. Here's a brief overview.

• Data protection laws
  Austria's commitment to data protection is evidenced by its strict adherence to the GDPR. Designed to safeguard EU citizens' data, it mandates that businesses obtain clear consent when collecting personal data, notify stakeholders in the event of data breaches and allow citizens access to their data.

• PSD2 and its implications
  PSD2 strongly influences Austria's payment landscape. This EU directive focuses on increasing pan-European competition and participation in the payments industry, including by non-banks. Strong customer authentication (SCA) is a cornerstone of PSD2, ensuring that electronic transactions undergo a two-factor authentication (2FA) process, heightening transaction security.

• Role of Data Protection Authority (Datenschutzbehörde)
  Austria's Datenschutzbehörde supervises GDPR compliance in the country. This body ensures businesses operate in accordance with data protection rules and has the power to levy substantial fines for non-compliance.

• Anti-Money Laundering (AML) and counter-terrorist financing
  In line with EU directives, Austria takes a staunch stance against money laundering and financing of terrorism. The Austrian Financial Market Authority (FMA) oversees these operations. Financial institutions are required to maintain meticulous records and conduct thorough due diligence, particularly for high-risk clients. They must also report any suspicious activity.

• Electronic signature regulations
  Digital transactions and agreements often require electronic signatures for validation in Austria. The country follows the Electronic Identification, Authentication and Trust Services (eIDAS) regulation, which standardises electronic signatures across EU member states. Austria recognises three types of electronic signatures, each with varying levels of security: simple, advanced and qualified.

• Ongoing monitoring and oversight
  Several Austrian institutions continuously monitor financial activities for compliance and security. For example, the Financial Intelligence Unit (FIU) at the Federal Criminal Police Office investigates suspicious financial activities, acting as a bulwark against money laundering and other financial crimes.

Key success factors

The Austrian payments landscape is firmly grounded, but like any complex system, it comes with its own challenges. Here's what businesses should keep in mind when developing a payments strategy for Austria.

• Reliance on traditional payment methods
  Despite the digital wave sweeping across much of Europe, a large portion of Austrians remain loyal to cash. Its widespread use can deter the adoption of newer, more efficient payment technologies and compel businesses to maintain multiple transaction channels.

• Evolving customer expectations
  More exposure to international digital platforms means Austrian customers are coming to expect real-time payments, instant refunds and straightforward digital payments. Meeting these expectations requires businesses to invest in technology and infrastructure, which is not always feasible for smaller players.

• GDPR compliance
  Like other European nations, Austria strictly abides by the GDPR to protect customers' data. Whilst safeguarding users, its stringent provisions can demand substantial investment and continuous monitoring, especially in sectors that handle a high volume of transactions.

• Cross-border transaction complexities
  Austria's status as an exporter – with a 2022 export value of more than $203 billion USD, according to the World Integrated Trade Solution (WITS) – underscores the importance of cross-border transactions. Whilst SEPA makes euro transactions quick and easy, dealing in other currencies (or outside the SEPA zone) presents challenges such as fluctuating exchange rates and country-specific regulations.

Key takeaways

Austria has a strong security infrastructure and vibrant financial sector. Here are the major takeaways to keep in mind whilst developing your strategy for entering this market.

Accept a range of payment methods

• Leverage direct bank transfers
  Austrians frequently use direct bank transfers, particularly through online banking. Platforms that support immediate bank-to-bank transfers can provide an added level of convenience for customers, particularly for larger transactions.

• Recognise the continued preference for cash
  Whilst digital transactions are gaining ground, cash remains the payment method of choice for many Austrians. Business owners, especially those with brick-and-mortar establishments, can optimise the customer experience by facilitating cash transactions and maintaining an efficient cash management system.

• Implement contactless and mobile payment options
  Although cash remains popular, Austria has seen growth in contactless card payments and mobile wallets. Integrating POS systems that accept contactless payments and promoting options such as Apple Pay or Google Pay can cater to the tech-savvy Austrian population.

Optimise operations

• Transparent cross-border transactions
  Considering Austria's strong trade relationships with Germany, the United States and Switzerland – its top three export partners in 2022, according to WITS – it's important for businesses, especially e-commerce platforms, to streamline cross-border transactions. This includes being clear about duties, taxes and potential foreign transaction fees.

• Monitor regulatory changes
  As part of the EU, Austria adheres to certain payment and data protection directives. Business owners should be well-versed with data handling and privacy obligations to promote customer trust.

• Employ top-tier security measures
  As online transactions grow, so does the potential risk of breaches. Investing in state-of-the-art encryption technologies and frequently communicating about these safety measures can bolster customer confidence.

Listen to local needs

• Ensure compatibility with Maestro cards
  Many Austrians use Maestro debit cards. Ensuring payment systems are compatible with Maestro, alongside other major international card networks, can improve transaction completion rates.

• Localise online platforms
  Austria's national language is German, although the German that Austrians speak differs slightly from their neighbours in Germany and Switzerland. To fully engage with Austrian customers, make sure gateways and website copy are written in Austrian German and that e-commerce pages reflect local norms.

• Provide clear refund and return policies
  Clear, straightforward return and refund policies can alleviate customers' apprehensions, especially for online purchases. Displaying this information prominently and providing a hassle-free return process can foster customer loyalty.