Payment methods in Germany

A culturally diverse population of 83 million makes Germany Europe’s second-biggest, and one famed for its history of manufacturing innovation and excellence. In recent years, its capital city Berlin has built a reputation as a startup hub, with success stories coming in many verticals, from music streaming subscription services to food delivery platforms. Local payment methods have proven a driver to the success of these businesses.

Germans are some of the most open cross-border shoppers in the world, with over 50% having placed an order on an international website. Despite this willingness, Germany is one of the most fragmented markets when it comes to payment methods. Non-credit card payment methods such as SEPA direct debit, SOFORT and Giropay account for the majority of online transactions. In retail (specifically fashion) another popular payment method is open invoice. This is where a third party pays out for products and services and then collects payment from the shopper after delivery.

Perhaps down to the risk-averse Germans’ preference to keep physical tabs on their spending, cash remains popular, though the popular girocard payment method is near ubiquity, with 68 million users. In the light of COVID-19, 45% of contactless payments are made using this local method, with many retailers, large and small, implementing card payments to encourage contactless payments.