When would you use an interface versus an abstract class?

Interfaces define capabilities that unrelated classes can implement. Abstract classes define a partial implementation with shared state, protected helpers and a template method. Since Java 8 interfaces can have default and static methods, and since Java 9 private methods, but they still cannot hold instance fields.

public interface PaymentMethod {
    void pay(long amount);

    default String currency() {
        return "INR";
    }
}

public abstract class BasePayment implements PaymentMethod {
    protected final String merchantId;

    protected BasePayment(String merchantId) {
        this.merchantId = merchantId;
    }
}

Choosing between them

• Use an interface when callers only need a capability or contract
• Use an abstract class when implementations share state or a fixed algorithm skeleton
• Prefer interfaces for API boundaries and test seams
• Use an abstract class when you need protected members or constructor logic

A class can implement many interfaces but extend only one class. That makes interfaces the more flexible extension point. If a design needs both, define an interface for the contract and an abstract base class as an optional implementation aid.