Cash is traditionally very popular in Germany. Nevertheless, current developments show digital payment methods and debit and credit cards are becoming increasingly important. This article presents the latest statistics, preferences, and influencing factors that shape payment behavior in Germany.

What’s in this article?

• Current statistics on payment behavior in Germany
  
• What are the most popular payment methods when purchasing online?
  
• What factors influence the choice of payment method?
  
• How can companies offer the right payment methods?
  

Current statistics on payment behavior in Germany

More than half of all purchases (51%) were paid in cash in Germany in 2023. At 26%, this accounts for around a quarter of the total volume of amounts paid. Overall, however, the proportion of cash payments is continually decreasing. Cash is increasingly being replaced by card payments or digital solutions. One reason for this could be, according to the Bundesbank, price increases.

Among the cashless payment methods, debit cards are popular—they are used for 27% of transactions, accounting for 32% of total spending. Credit cards and direct debit/bank transfers together account for around 10% of payment transactions, while online payments and mobile payment methods currently only account for 3% and 6%, respectively. However, the popularity of digital payment methods continues to increase, especially among younger target groups.

Although cash is still the most frequently used means of payment in Germany, other payment methods are used, especially for larger sums. This is reflected in the turnover of the individual payment methods.

What are the most popular payment methods when purchasing online?

Which payment methods do people in Germany prefer to use when shopping online? Statista conducted a comprehensive survey on this topic in 2023.

E-wallets

With 65% of respondents preferring e-wallets (e.g., PayPal), digital wallets are by far the most popular payment method for online purchases. Their popularity can be explained by their ease of use, fast processing, and high security. Users do not have to transmit sensitive bank details directly to the online shop, which increases trust in this method.

Payment on invoice

Payment on invoice follows in second place with 43%. This method offers the advantage that customers only have to pay after receiving and inspecting the goods. This payment method is particularly trusted by older target groups.

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Klarna and credit cards

Klarna (28%) combines the advantages of purchasing on account with modern digital functions. The flexibility to pay later or arrange installment payments makes this provider particularly attractive.

Also at 28% are credit cards from domestic banks and debit cards. These include worldwide acceptance and protective mechanisms, such as chargebacks, if there is a problem with the order.

Bank transfers and direct debit

Bank transfers (26%) and direct debit (20%) remain solid options. They offer the advantage of a direct connection to the bank account and enable secure, transparent payment processing without intermediaries. While bank transfers are particularly popular for larger transactions or one-off payments, direct debits are ideal for recurring payments, such as subscriptions or bills. Customers also benefit from a high degree of control and buyer protection, especially in the event of unauthorised debits.

Visa and Mastercard

With a share of 26%, Visa and Mastercard continue to be among the preferred payment methods for online shopping. Their major advantage is their worldwide acceptance, which allows customers to shop in national and international shops without any problems. In addition, credit and debit cards from Visa and Mastercard offer modern security features, such as two-factor authentication, buyer protection, and the option of chargeback in the event of fraud or incorrect orders. They are a reliable and practical choice, especially for frequent travelers and regular online shoppers.

Other payment methods

In addition to the payment methods already mentioned, there are a number of alternatives that might become even more important in the future:

• Vouchers and gift cards (18%): These are ideal for purchasing digital products or giving a gift.
  
• Payment in store (9%): With this hybrid solution, goods are ordered online and paid on site.
  
• Instant transfer (9%): These methods are particularly popular with users who rely on direct bank transfers.
  
• Purchase on credit (8%): This option offers additional financial flexibility for larger purchases.
  
• Mobile payment apps (6%): The hype surrounding mobile payment is not yet reflected in payment behavior in Germany.
  
• American Express (7%): The credit card American Express is particularly popular with business travelers and premium customers. Benefits such as exclusive bonus programs, travel insurance, and strong buyer protection make this card attractive, even if it is not accepted in all online shops.
  
• Cash-on-delivery payment (5%): A traditional method primarily used by security-conscious customers.
  
• Cryptocurrencies (3%): This innovative option is still rarely used but is slowly becoming more relevant among technology-savvy users.
  

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What factors influence the choice of payment method?

The choice of payment method is influenced by a variety of factors, ranging from customers’ individual preferences to regional and technological conditions. Companies that understand these influencing factors can tailor their payment options and increase customer satisfaction. Below, we present the most important influencing factors:

Demographic factors

According to the study “Payment behavior in Germany 2023” from the Bundesbank, different age groups often have different payment behavior. Older customers are more likely to use cash or traditional payment methods such as bank transfers because they are familiar with them. Younger generations, on the other hand, prefer modern payment options—such as mobile payments, digital wallets, or “buy now, pay later” (BNPL) services—that work as quickly and easily as possible via smartphone. Highly educated and higher income groups often gravitate toward cashless or unconventional payment options.

Technological developments

The availability and acceptance of new technologies have significantly changed the payments landscape. Contactless payments, near-field communication (NFC) technology, and digital wallets such as Apple Pay or Google Pay are becoming more and more popular. According to Statista, more than 80% of Germans had a smartphone in 2023. Accordingly, more and more users are discovering the advantages of mobile payment methods.

At the same time, technological advances are setting new security standards that increase trust in digital payments. Companies should ensure they keep pace with technological developments to meet the expectations of their customers.

Regional differences

Payment behavior varies greatly from region to region. In Germany, for example, cash still plays an important role despite a continuous decline, while Scandinavian countries operate almost cashlessly. In Asia, however, quick response (QR) code payments are extremely common. Internationally operating companies need to understand these regional differences and adapt their payment methods accordingly.

Cultural factors

Cultural preferences also influence the choice of payment method. In some cultures, cash is viewed as the safest and most trustworthy means of payment, while other cultures embrace advancement more quickly. These cultural differences can also influence the speed at which customers adopt new payment methods.

Security and privacy concerns

Many customers choose payment methods they find to be secure and privacy-friendly. Companies that communicate clear security policies and use trusted technologies can increase customers’ trust. Security concerns are particularly important with new technologies, such as cryptocurrencies or digital wallets.

Economic and political framework conditions

Legal requirements and economic conditions can also influence the choice of payment methods. The introduction of Single Euro Payments Area (SEPA) instant payments or regulations on the cost neutrality of certain payment methods can, for example, help your customers use them more. At the same time, economic uncertainties or inflation can shift customer preferences toward cash.

Convenience and availability

Ultimately, customers prefer simple and convenient payment methods. Contactless payments that only take a few seconds or scanning one QR code are increasingly in demand. The availability of automatic teller machines (ATMs), point-of-sale (POS) terminals, or digital wallets also plays an important role. Companies that ensure smooth usage increase their attractiveness.

How can companies offer the right payment methods?

Payment method can be the deciding factor in whether a customer buys or abandons a product. In order to offer an optimal solution to as many customers as possible, the right mix of payment options is important.

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Here are some tips on how businesses can optimize their payment methods:

Analyze target group

The first step is to clearly understand the target group. Older customers often prefer traditional payment methods—such as cash or bank transfers—while younger generations gravitate toward digital wallets, mobile payments, or BNPL services. Collect data about your customers’ preferences in order to offer the right options.

Provide a wide range of options

Diversity in payment methods is important. Your business should offer common options such as cash, debit, and credit cards as well as online transfers. In addition, digital wallets—such as PayPal, Apple Pay, or Google Pay—make sense to cover modern needs.

Take regional differences into account

Different countries and regions have different preferences. It is, therefore, important for international providers to take local preferences into account.

Put safety first

Customers are increasingly paying attention to security when paying. Use technologies such as two-factor authentication and secure sockets layer (SSL) encryption to provide trust. Openly communicate how customer data is protected, and offer secure, proven payment methods.

Promote mobile payments

The use of mobile payments is continually increasing. Integrating NFC-based technologies at checkout—such as contactless cards or smartphones—can be a competitive advantage. For online shops, mobile payment services should function smoothly and be easy to use.

Keep an eye on costs and fees

Some payment methods can be expensive for businesses. Be sure to calculate the costs of implementing and using payment services and include these in your pricing. Transparent fee models create clarity.

Use instant payments as an advantage

The introduction of nationwide and cost-neutral SEPA instant payments in 2025 will create a new dimension in payment processing. According to Bundesbank, 80% of those surveyed are already using this quick option, which indicates a high level of acceptance.

Maintain flexibility

The needs and expectations of customers are constantly changing. Companies should, therefore, remain flexible and be ready to integrate new payment methods as they become more important. An agile system that can react quickly to market trends ensures long-term competitiveness.