Raynor de Best
Content expert covering payments and (crypto)currencies
Digital payments landscape in Germany - statistics & facts
Digital payments in Germany take up a smaller role in offline transactions than in online transactions, as it is one of the most cash-reliant countries in the EU. Estimates are that the share of cash in German physical stores was over 50 percent. The situation is very different for payments used in e-commerce. PayPal and Klarna are significantly more popular online payment brands in Germany than other options available. Indeed, Germany is estimated to make up almost a third of Europe's overall buy now, pay later market due to the popularity of Klarna in the country. Interestingly, the presence of two big international names in Germany is a defining trait of this country's adoption of digital payments.
Digital payments refer to any form of cashless payment, or payments conducted without banknotes or coins, in an online or offline environment. Such payments can include mobile payments - digital payments performed with a mobile device - but also relatively new trends like buy now, pay later (BNPL), cryptocurrency, or instant (real-time) payments. Out of all these digital options, which developments are noteworthy to know about for Germany?
Digital payments refer to any form of cashless payment, or payments conducted without banknotes or coins, in an online or offline environment. Such payments can include mobile payments - digital payments performed with a mobile device - but also relatively new trends like buy now, pay later (BNPL), cryptocurrency, or instant (real-time) payments. Out of all these digital options, which developments are noteworthy to know about for Germany?
Digital payment developments in Germany come from abroad
German online payments lean heavily towards digital wallets and buy now, pay later. PayPal's usage for online transactions in Germany was the highest in Europe and even higher than in its native U.S. Another notable online payment method is SEPA, which reveals itself by looking at the number of direct debit transactions in the country. Direct debits are automated transactions between merchants and banks that stem from third-party payment providers at a regular timeframe. The SEPA system - or the Single Euro Payments Area, an effort from the EU to facilitate cross-border bank transfers between its member states. As Germany has a complicated financial infrastructure, by virtue of the highest number of banks within a single country in Europe, such third-party services are relatively popular.When will cash no longer be king in German POS?
Germany's share of cash was noticeably higher than other European countries for several years. Some believe debit cards will eventually become Germany's most popular transaction method in physical stores. The country's debit card penetration is predicted to increase by only two percentage points between 2022 and 2029, which makes it unclear when that change would happen. Instant payments could be another option to help digitalize payments in Germany. In 2021, such real-time payments in Germany made up roughly 2.5 percent of all payment traffic as payment providers were still learning to work with the pan-European SCT Inst initiative. German banks joined this initiative alongside banks from Belgium, France, the Netherlands, and Spain, but the scheme does not yet have an API overlay, limiting its options somewhat.
