If you make reservations via the Interrail online booking tool in the DiscoverEU Travel App, you can pay by credit card, iDeal, PayPal, or seat reservation credits. Reservations at stations or other sales channels can be paid in cash, and often with debit cards as well, though this varies per country.
You will receive seat reservation credits together with your DiscoverEU Interrail Pass. These can be used to book your first 4 seat reservations for free, after which you must pay for the remainder of reservations yourself. For more information, you can check this article. Your seat reservation credits would be utilised first. If you need to book more trains and all your credits have been redeemed, then you need to pay it yourself.