Consumer payment preferences in Germany are shifting. While cash remains the preferred method, buy-now-pay-later options can influence purchasing decisions.
Consumer Payment Preferences in Germany – Current Landscape
Convenience is now at the heart of preferred payment methods in Germany, and are increasingly influencing purchasing decisions. The convenience of digital payments is particularly appealing to younger, higher-income Germans. Failing to offer their preferred options, risks alienating this consumption-driven target group and losing valuable customers.
Flexibility in payment timings is another key factor in consumer payment preferences. Buy-now-pay-later options are particularly important for wealthier consumers, influencing their purchasing decisions. Consumers with tighter budgets could also benefit from such options, but they need to feel more confident and secure in managing their more-limited finances effectively when using these services.
Retailers seeking to adapt to a more digital, cashless society must consider that many Germans, especially those on tight budgets, still rely on cash for financial control. For now, a balance between cash and cashless payments is essential, perfectly catering to German consumer payment preferences.
German Consumer Payment Preferences – Market Statistics
- Preferred Payment Methods in Germany: 52% of Germans aged 18 to 34 are more likely to shop with an online retailer that offers buy-now-pay-later options.
- Consumer Payment Preferences & Concerns: Only one third of Germans voice security concerns, and this proportion is expected to decline.
Consumer Payment Preferences Report – What’s Inside?
Key Topics Analysed in this Report
- Overview of current consumer payment landscape and the outlook for the next five years.
- Usage of payment methods, including cash, and how usage has changed compared to last year.
- Preferred payment methods in Germany (in-store and online, and depending on amount spent).
- Concerns about the security of online payments.
- Level of comfort with a future cashless society.
- Consumer behaviours relating to payments, such as attitudes towards buy-now-pay-later services and convenience at online checkouts.
Meet the Expert Behind the Analysis
This report is written by Lena Rittmann, Analyst. Lena focuses on reports that provide consumer insights, covering various industries. During her studies and her internships, she gained practical experience in social media monitoring and journalism and completed a one-year training in media consulting and planning. She holds a M.Sc. in International Management from Bochum University of Applied Science.
Younger and wealthier consumers are driving the move towards a cashless society, but those with tighter budgets need better support when it comes to budgeting in order to gain confidence in these payment methods.
Lena Rittmann
Analyst
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EXECUTIVE SUMMARY
- What you need to know
- Opportunities
- Outlook
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OPPORTUNITIES
- Make a wide range of payment options a selling factor
- Freedom of choice at checkout is key
- Innovate in BNPL to meet rising expectations
- Accommodate 18-34 year olds with flexible payment terms
- Mitigate security concerns with convenience
- Increase trust to remove extra steps for consumers during payments
- Use growing consumer confidence in security to innovate in convenience
- Embrace the shift to digital payments
- Help older and low-income consumers feel more confident about going cashless
- Make acceptance of mobile payment options more visible
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CONSUMER
- Payment methods used
- Cash is the most widely used payment method in Germany
- Graph 1: how often consumers use payment methods, 2024
- Young Germans lead the way in using diverse payment methods
- Graph 2: repertoire of payment methods used frequently (weekly-monthly), by age, 2024
- Graph 3: repertoire of payment methods used at least yearly, by age, 2024
- A higher income encourages more diverse payment behaviours
- Graph 4: repertoire of payment methods used frequently (weekly-monthly), by financial situation, 2024
- Cashless payments are more noticeable among younger…
- Graph 5: cashless payment methods used weekly-monthly, by age, 2024
- …and wealthier Germans
- Graph 6: payment methods used weekly-monthly, by net monthly household income, 2024
- Use credit card programs to boost loyalty among high earners
- Where mobile wallets have potential to grow
- Online payment services are popular across age groups, but younger people use them more frequently
- Graph 7: weekly-monthly use of an online payment service provider, by age, 2024
- People are using both traditional and newer payment methods more often
- Graph 8: how consumers’ payment method usage has changed compared to a year ago, 2024
- Preferred payment methods
- Most Germans prefer cash payments for small, in-store purchases
- Graph 9: payment preferences for in-store vs online purchases, 2024
- Online payment services are the top choice for online payments, but can’t convince in-store shoppers
- Make mobile payment options more visible for younger consumers
- Graph 10: preference for using a mobile wallet, by purchase value, 2024
- girocard advertises mobile wallet usage
- Online payment security
- Views about online payment security are mixed
- Leverage growing consumer trust and highlight the benefits of innovative payments
- Security concerns regarding mobile wallets are not a dealbreaker
- Graph 11: agreement that mobile wallets are less secure than other payment methods, by usage of mobile wallets, 2024
- Germans prefer one-time passcodes to authenticate payments
- Graph 12: authentication methods consumers would be most comfortable using for an online payment (any rank), by age, 2024
- Convenience
- Fast and easy checkouts can win customers
- Simplify loyalty programs through seamless payment integration
- Build trust in data storage by highlighting time savings
- Convincing budget-conscious consumers to save their payment details requires more effort
- Graph 13: I would be comfortable with allowing online retailers to save my payment information, by financial situation, 2024
- Attitudes towards a cashless society
- Cash is still part of German life, but younger generations will drive change
- Graph 14: consumers who would feel comfortable living without cash in the future, by age, 2024
- Graph 15: consumers who avoid places that only accept cash, by age, 2024
- A cashless future isn’t for everyone – allow consumers time to adapt
- Help consumers on tight budgets adapt to a cashless payment world with budgeting tools
- Perspectives on payment timings
- One in three Germans base their purchase decision on BNPL availability
- Boost lower earners’ confidence in BNPL to unlock its benefits
- BNPL becomes essential to keep up with consumers’ expectations
- Broaden use cases for BNPL
- Address growing demand for flexible instalment-based payments among 18-34 year olds
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MARKET DRIVERS
- Cost-of-living crisis is still a problem for most Germans
- The long-term growth of ecommerce highlights the need for reliable online payment methods
- Graph 16: nominal changes in ecommerce revenue by quarter, 2022-24
- Cross-channel shopping calls for aligned payment solutions
- Graph 17: consumers who shopped online with retailers with physical stores in the last 12 months, by age, 2024
- Rise in smartwatch use fuels mobile wallet growth
- Graph 18: personal ownership of smartwatches, by generation, 2024
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MARKET LANDSCAPE
- Cash accounts for half of all transactions in Germany
- Graph 19: use of payment instruments measured by the number of transactions*, in %, 2023
- Graph 20: use of payment instruments measured by turnover*, in %, 2023
- Share of cash payments declines, while cashless payments are on the rise
- Digital payment options in retail expand, while access to cash deteriorates
- Proportion of over-indebted Germans is falling
- Wero is the new unified payment system in Europe
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APPENDIX
- Appendix – market definition, abbreviations and consumer research methodology and language usage
- Market definition
- Abbreviations
- Generations
- Consumer research methodology
- A note on language
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