Methods of payment

The vendor can usually decide which payment methods they accept. The options they offer must not be unreasonable for consumers, however.

The vendor can decide on methods of payment

The vendor can usually decide which payment methods they accept. The options they offer must not be unreasonable for consumers, however.

If the vendor does not accept cash or payment cards, this must be specifically mentioned in their marketing.

More payment methods must be offered for essential services

Several methods of payment must be offered to pay for essential services, such as electricity, water, heating, or a telephone subscription. The vendor cannot refuse a payment method that is widely used.

Can a company offer credit for which costs are charged as the only payment method?

In certain situations, a company may, due to a particular risk, have a reason for requiring payment by credit card. These situations include car rental and hotels, as the company allows the customer to use its property.

If payment by credit is the only method the vendor accepts, they must tell you about this in advance. The vendor must tell you about the payment method already in their marketing and give you the possibility to choose whether you wish to make the purchase on credit or find another vendor.

Credit cannot be the only method of payment available to pay for essential services. The availability of essential services may not depend on your creditworthiness.

Advance payment is always a risk

When you are choosing the method of payment, the things you should pay attention to include the security of making the payment and your chances of getting your money back if the vendor does not follow the agreement. Before you pay in advance you should assess if you can trust the vendor and consider how big of a risk you are willing to take.

The bigger the purchase, the more risks are involved in advance payment. You should generally not pay for goods before they are ready to be handed over and you have had an opportunity to inspect them. You should normally not pay for a service before it has been provided.

When you pay in advance, there is a risk that the company may stop operating before it has delivered your product. Paying in advance means that you lose the right to withhold the payment in case there are defects or delays in the product or service.

If the company only accepts an advance payment:

  • Ask about other payment methods. If the vendor will not let you pay after you have received the product, giving them a reasonable deposit is a better option than paying the full price in advance. In case of package travel, prefabricated homes, and consumer contracts on extensive renovation or construction, the law dictates that a security must be provided to protect the advance payments made by consumers.
  • Use a credit card or some other type of credit offered to pay for your purchases. That way you can also demand a refund from the credit company if the vendor does not deliver the purchase or if it has a defect. You may demand a refund also on debit card payments if the debit card company has adhered to this in their terms and conditions or otherwise.
  • Consider if you could make the purchase somewhere else on more reasonable terms.

For businesses 

As a rule, demanding advance payment is an unfair condition in consumer trade, unless there is a specific, justified reason for it. It may not be used just as a precaution.