Germany Payments Market Size (2024 - 2029)

Germany Payments Market Analysis

The German payments market is expected to register a CAGR of 12.32% from 2022 to 2027. The primary factors driving the market's growth in the region are robust growth in E-commerce, increasing internet penetration, and rapid adoption of mobile payments, among others.

Germany is a cash-dominant country, but cash payments have been actively discouraged in Germany since the pandemic. Consequently, most establishments and stores have started accepting card payments, and Germans have begun to move toward digital payment solutions.

As such, digitization, coupled with the advent of the second Payment Services Directive (PSD2) and robust e-commerce growth, paved the way for developing many new payment options in the region. The emergence of Apple Pay, Google Pay, and mobile payment solutions from banks like Kwitt will likely fuel mobile growth.

Innovative digital payment solutions are making their way into the German payments market. Driven predominantly by the rising use of smartphones and the emergence of digital wallet payment options such as PayPal, it emerged as the newest number one trend for online payments in Germany.

Furthermore, more people are using electronic means for transactions. New card terminals, more accessible solutions for smaller merchants, cashless ticketing in transit, mobile payments, and contactless cards are all important. Government-led initiatives are also helping by recently implementing several legislative initiatives to strengthen the payment sector's resilience.

The Covid-19 outbreak has significantly accelerated the trend toward cashless payments in Germany. According to Bitkom, Germany's digital association, more than 70% of Germans would like to see more digital and contactless payment options. In-store payment behavior has also evolved at a pace during the outbreak. During the pandemic, Germany has seen a surge in (contactless) card-based and mobile payments. Merchants actively encouraged customers to pay by card, ideally contactless, instead of cash.

Germany Payments Industry Segmentation

The German Payments Market is segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality). E-commerce payments include online purchases of goods and services such as purchases made on e-commerce websites and online booking of travel and accommodation. The market scope excludes online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for Point-of-Sale, all transactions that occur at the physical point of sale are included in the scope of the market. It includes traditional in-store transactions and all face-to-face transactions regardless of the location of the transaction. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).

The study tracks key market metrics, underlying growth influencers, and significant industry vendors, supporting Germany's market estimates and growth rates throughout the anticipated period. The study looks at COVID-19's overall influence on the German payment ecosystem.