Germany has a variety of payment methods that are commonly used for both in-store and online purchases. Cash, debit cards, credit cards, and online payment services like PayPal are all popular options that consumers utilize on a regular basis.
Cash
Cash is still widely used in Germany, especially for smaller, everyday transactions. According to a 2019 study by the Deutsche Bundesbank (Germany’s central bank), 74% of all transactions in Germany in 2018 were conducted in cash, accounting for 54% of the total value of payments. Germans made some 58 billion cash payments in 2018 with a total value of over €207 billion. Cash remains the dominant payment method for in-person retail, used for 80% of payments under €20. However, the use of cash is declining as electronic payment methods gain popularity. The total value of cash payments fell by 2.7% from 2017 to 2018.
Debit Cards
Debit cards linked to bank accounts are very commonly used in Germany. Known as girocards, EC cards, or Maestro cards, German debit cards utilize the girocard network run by the German banks. There are approximately 100 million girocards in circulation in Germany. Debit cards overtook cash as the most frequently used payment method in Germany in 2018, accounting for 35% of payments. However, in terms of value, debit cards only accounted for 29% of payment transaction value. Girocards can be used in stores, online, and at ATMs. One of the most popular uses is online bank transfers using two-step authentication with an SMS code. Debit cards usage grew by 13% from 2017 to 2018.
Credit Cards
Credit cards are less commonly used in Germany compared to many other European countries. The most widely accepted credit cards are Visa and Mastercard. American Express and Diners Club cards are accepted at some larger stores and hotels but are not as widely used. Credit cards accounted for only about 18% of the total transaction value in Germany in 2018. Some reasons for the lower usage compared to other countries include:
- High use of debit cards, which are preferred for online purchases
- Concerns about taking on debt and interest charges
- Strong privacy protections make some Germans wary of sharing credit card data
However, credit card usage has been increasing in recent years, especially among younger generations and for higher value purchases like vacations. Credit card spending grew by 16% from 2017 to 2018.
PayPal
PayPal is a very popular online payment service used extensively in Germany for e-commerce purchases, online marketplaces like eBay, and peer-to-peer transfers. One survey found that 28% of online shoppers in Germany used PayPal for purchases in 2019. PayPal allows users to securely link bank accounts or cards to make quick digital payments without sharing financial details each time. Other similar online payment services like Sofort are also used but PayPal dominates the market. PayPal is so ubiquitous in Germany that some websites may not even process payments without it.
Other Payment Methods
Some other payment methods used in Germany include:
- Direct bank transfers – Used for larger purchases and recurring payments like rent or utilities
- Invoice purchases – Common for online shopping from major retailers
- Mobile payment services – Growing in popularity, like Apple Pay and Google Pay
- Cryptocurrencies – Small but growing user base interested in options like Bitcoin
Most Popular Payment Methods
Here is a summary of the most popular payment methods used in Germany:
Payment Method | Percentage of Transactions 2018 | Percentage of Value 2018 |
---|---|---|
Debit cards | 35% | 29% |
Cash | 74% | 54% |
Credit cards | 5% | 18% |
Cash and debit cards are used for most routine smaller transactions, while credit cards and PayPal tend to be used more for higher-value online purchases. But payment preferences are gradually shifting toward electronic payments, especially among younger generations. The use of cash is declining while debit cards and new services like mobile payments gain ground. Germany may be moving away from its reputation as a cash-centric country in the years to come.
Regional Differences
There are some regional differences in payment method preferences within Germany:
- Former East Germany has higher use of cash – Over 80% of purchases compared to 74% nationwide
- Urban areas have higher rates of electronic payments than rural areas
- Debit cards are extremely popular nationwide
- Younger generations in cities rely more on cards and mobile payments
Security of Payments
Germans are very concerned about payment security, which contributes to preferences for cash and debit cards. Payment systems in Germany have very robust security protections, including:
- Chip and PIN technology required for cards
- Strong customer verification for electronic bank transfers
- High-standards for mobile payment data protections
- Extensive anti-fraud protections on major networks like PayPal
Germans tend to be cautious about data privacy. Cards and payment networks investing in the latest security innovations to prevent fraud and data breaches gain greater consumer trust.
Future Payment Trends
Experts forecast that Germany will continue to transition toward electronic payments in the future. Some potential changes include:
- Mobile payments grow as infrastructure expands and security improves
- Debit cards likely remain extremely popular due to security perceptions
- Credit cards gain broader acceptance by retailers
- Peer-to-peer payment apps gain popularity, especially for splitting bills
- More frictionless “invisible payments” in apps and devices
- Continued decline of cash toward minority of purchases long-term
But even with these shifts, cash will likely maintain an important role in German consumer transactions for years to come. The national attachment to physical currency persists, especially among older generations. Cash provides anonymity that many Germans continue to value highly. So while electronic payments rise, major change will likely happen gradually over time.
Conclusion
Germany relies on a mix of cash, debit cards, credit cards, and online services like PayPal for payments. Cash and debit reign supreme for now, but gradual shifts toward electronic payments are predicted in the coming years as infrastructure expands and younger generations rely more on cards and apps. Security, privacy, and fraud prevention remain paramount concerns in German payment networks. Payment methods will continue adapting with technology changes and consumer preferences, but expect Germany to remain committed to offering consumers a choice between efficient electronic payments and good old physical cash.