Germany is a diverse market when it comes to payment preferences. With an evolving payment landscape, understanding prevalent payment methods is crucial. Here, we delve into the various payment methods in Germany, spotlighting the trends and key players in 2023.

Payment by card in Germany

Germany hosts international card systems like Visa and MasterCard. However, the local system, Girocard, operated by Deutsche Kreditwirtschaft, is a popular choice among Germans. As per recent data, approximately 121 million debit cards were in use in Germany at the end of 2021, with Girocard being a primary player. The cards are often co-branded with Mastercard (Maestro) and Visa (V-Pay) to facilitate global usability. Girocard is responsible for a whopping 88% of debit card payments, with the remaining 12% being carried out using standard Mastercard and Visa cards​1​.

Local actor: Girocard

Payment by cash

Cash remains a significant player in Germany’s payment landscape. It’s a testament to the traditional payment habits of Germans. In the digital realm, the trend sees a slight shift. E-commerce platforms have adapted to accommodate cash preferences. They often offer “cash in advance” or “cash on delivery” options. These options resonate with the local populace’s trust in cash transactions.

The method of “cash in advance” is among the top five payment methods in German e-commerce. It’s a straightforward method. Consumers transfer the payment to the seller before receiving the goods. It’s a digital adaptation of the conventional cash payment. It upholds the trust and tangibility associated with cash.

The “cash on delivery” method also finds favor. Consumers pay in cash when the goods are delivered. It’s a practice that has carried over to the online shopping domain. It reflects a blend of traditional and modern payment habits.

Local actors: Paysafe Cash

PaysafeCash logo

Payment by Bank Transfer

Germany leads in real-time payment transactions in Europe. In 2021, the daily volume averaged 1.2 billion. The country adopted the pan-European SCT Inst payments scheme early. It’s known as SEPA Instant. It facilitates ultra-fast euro payments across 36 countries. These countries are within the Single European Payment Area (SEPA).

Over 1,300 German financial institutions offered the SEPA Instant Payment scheme. This was as of March 2023. It’s the highest in Europe. Despite this, real-time payments only represented 2.5% of total payments volume in 2022. This showcases the still untapped potential in this market.

A proposed pan-European regulation is on the horizon. It requires banks and payment service providers to offer low-cost real-time euro payments to all consumers. This is expected to further accelerate real-time payments adoption in the local market.

The daily real-time payments volume in Germany is projected to reach 3.4 billion by 2026. This represents a compound annual growth rate (CAGR) of 24% between 2021 and 2026​1​.

Local actors like Giropay and Sofort by Klarna are pivotal in facilitating bank transfers. They provide secure and efficient platforms for both consumers and merchants. The ongoing advancements in the digital payment infrastructure are likely to propel the use of bank transfers in e-commerce further.

Local actors: Giropay (Giropay, Paydirekt, and Kwitt have merged to form a unified system under giropay, simplifying bank transfers further), Sofort by Klarna

Giropay logoΒ  Sofort logo

Payment by installment and BNPL

Buy Now Pay Later (BNPL) is gaining traction in Germany. It’s particularly popular among younger consumers. According to a 2021 EY study, BNPL could constitute up to 10% of total payment volume in Europe by 2025. Germany follows this trend with providers like Klarna and Afterpay leading the charge.

Local actors: Unzer, Ratepay, Mondu, Billie, PayOne

Unzer logoΒ  Ratepay logoΒ  Mondu logoΒ  Billie logoΒ  Payone logo

Payment by digital wallet and X-Pay

E-wallets have risen in popularity for online payments, with a share of 19% in 2020. This trend is likely to have continued into 2023, with PayPal dominating the digital payment scene. PayPal is chosen by 57% of German consumers over other mobile payment options​1​.

Local actors: Skrill, Payback

Skrill logo Β 

If the payment methods in Germany intrigue you, feel free to access the #PayWorldTour library for more insights.

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