E-PAYMENT Figure 4. Number of e-money purchase transactions in Germany from 2000 to 2021(in millions) Germans are known to be heavy cash users, and since this article was first published in 2018, cash remains the most used payment type at the point of sale. In fact, research from Global Data forecasts ATM cash withdrawals to increase from €245.7 million 2019 figures to €272.9 million (11%) in 2023. It’s no wonder mobile payments have been slow in adoption across some verticals in Germany.
Nevertheless, eCommerce in Germany is the third largest eCommerce market in Europe. The market was expected to surpass €69 billion in 2019, equivalent to nearly 9% of total sales in the country, and findings from JP Morgan account for the value of eCommerce transactions in Germany at €79 billion. While the impact of Covid-19 has resulted in consumers being more cautious with their spending, where Germany’s economy shrunk by 3% according to Focus Economics, Germany is expected to return to growth by the end of 2021.
The online payments landscape in Germany Total eCommerce revenue for business-to-consumer transactions was valued at €94 billion in 2019, which had an expected compound annual growth rate (CAGR) of 9% to 2023.
A survey from Statista in 2020 revealed almost half of the respondents (48%) selected PayPal or similar options as their number one choice when asked which payment method they preferred for online shopping. Invoice came in as second preference at 21%, followed by debit or credit card (19%), direct debit payment through bank (6%) and mobile app, such as Swish or MobilePay (2%). Clearly, after years of paying with invoices topping consumer preferences, German shoppers are showing a hunger for new online payment methods.
Germany has a substantial online audience with an expected 77% of the population making online payments in 2021 and is expected to grow to 81.5% by 2024. This is a clear indicator of a growing appetite for online shopping across Germany’s considerable eCommerce market. The quick adoption of new payment methods shows consumer confidence and trust as online shoppers. Furthermore, as internet usage continues to increase with almost 70 million users in 2020, this presents an opportunity for businesses to convert more offline customers to their eCommerce offering.
