The e-commerce market is one of the World’s largest and is growing rapidly. In 2025, the revenue is expected to reach $4,791bn. It shows us that e-commerce opportunities are enormous.
Also, you might be surprised to learn that debit cards and credit cards are off the podium. Three other types of payments are leading the way, and we’ll talk about them in a moment.
So, how do e-commerce businesses in Germany make payments? What are the trends and dynamics shaping the industry?
We’ll take a look at all of these in this guide.
Online Payment Services
As of September 2024, the most common online payment by type in Germany was online payment services (like PayPal, Google Pay, or Karna). This is claimed by as many as 66% of respondents.
Online payment services have gained popularity in Germany due to their convenience and security. Germans value efficient and reliable financial transactions, and online payment services offer quick and easy ways to make payments and transfers.
Also, concerns about data privacy and fraud have led to a preference for secure digital payment methods. Thus, services like PayPal, Amazon Pay, and mobile payment apps have become integral to everyday life. Moreover, about 90% of German consumers chose PayPal over other online payments.
Invoices
The second most used payment method in Germany is invoice. They account for 50% of German consumers. If you offer this payment method, you’re tapping into a payment option that half of your customer base prefers.
Invoices rely on the merchant delivering the goods with an invoice. Consumers can try the goods and either return them or pay within a time period, usually 14 or 28 days.
Buyers love it because they aren’t required to pay upfront. They get to try their goods first and decide if they like them enough to pay for them. There is no requirement to enter sensitive data into an online portal and the speed of purchasing is also improved because only an address needs to be inputted.
Many third-party services operate within the open invoice structure, allowing consumers to manage their invoices and payments through their portals.
The downside for merchants is that returns of goods are high.
Direct Debit
Direct debit closes the podium with 45% of the votes. This method is popular for online shops as it offers a high level of convenience and allows users to automate recurring payments. It reduces the need for manual payments and simplifies financial management.
Also, direct debit is cost-effective for businesses, as it minimizes transaction fees compared to credit card payments. Moreover, it’s considered a secure payment method because it requires authorization.
As direct debit is widely accepted, it’s a versatile option for various online services and transactions, further contributing to its popularity.
Debit Card
As we mentioned, outside the sub-niche are debit cards with a score of 38%. It’s the same percentage as it was in 2023, so nothing changed much for Germans here. Despite this, debit cards are still frequently used by businesses and customers who enjoy convenience and financial control. They are widely accepted, making them versatile for a variety of transactions.
Debit cards provide instant access to funds in a linked bank account, eliminating the need for potential debt. In addition, they are available to a wide range of people, including those with no credit history.
The interesting thing here is that the global debit card market is projected to reach $96.84 billion, up from $95.78 billion in 2024. So, after all, debit card usage is slowly growing worldwide, with a compound annual growth rate (CAGR) of 1.1%.
Technological advancements are influencing debit card usage. The adoption of real-time payments is expanding, with services like FedNow and RTP introducing more instant payment use cases. Additionally, open banking technologies and pay-by-bank options are transforming account-to-account payments. They provide consumers and merchants with seamless, secure, and potentially lower-cost payment alternatives.
Credit Card
Credit card usage still remains uncommon in the German economy due to factors like internet constraints and a conservative approach to spending. They account for 36% in Germany.
Many Germans prefer to avoid debt and value financial responsibility, which makes debit cards and direct debits more appealing. Concerns about accumulating interest and fees deter some from using credit cards. As a result, Germans often favor payment methods that allow them to spend within their means and avoid credit-related financial risks.
Despite these trends, the total value of credit card transactions in Germany is expected to grow from around $10.4 billion in 2023 to approximately $12.1 billion by 2028 (a compound annual growth rate (CAGR) = 2.4%.)
Prominent credit card brands include VISA and Mastercard.
Prepaid Cards/Vouchers
Prepaid cards, vouchers, and gift cards, while less popular than other payment methods, have still garnered attention in Germany. 23% of German consumers opt for them.
These payment options offer a degree of financial control and allow users to load a specific amount of money onto the card or voucher for future use. They are often favored for budgeting purposes, loyalty programs, and for those who wish to avoid credit-related risks.
While prepaid cards and vouchers may not be as widespread as other payment methods, their popularity suggests that Germans appreciate flexibility and planning their transactions.
Cash in Advance/on Delivery
Cash in advance and cash on delivery represent even rarer payment methods in the German payment landscape, chosen by 17% and 7% of consumers, respectively. These methods reflect a conservative and cautious approach to online and offline purchases.
Cash in advance involves paying for goods or services before receiving them, emphasizing trust and reliability in the seller. Cash on delivery, on the other hand, allows customers to inspect items before paying. It mitigates concerns about fraud or product quality.
Both payment options cater to the diverse preferences of German consumers and are also chosen, although cash on delivery is less common.
4% of respondents say they haven’t conducted any payments online and 3% use other options.
What Does This Mean For You?
Germany has possibly one of the most diverse payment landscapes, and online payments have become an integral part of daily life in Germany, driven by a combination of factors such as convenience, security, and trust in digital transactions.
Online payment services and invoices stand out as the most popular choices, reflecting the nation’s growing embrace of digital transactions. Direct debit follows closely. Then, we have debit cards and credit cards with almost the same score. Prepaid cards and vouchers appeal to those who prioritize budgeting, and cash in advance and cash on delivery serve as alternatives.
Your payment method needs to suit your business, so factor this in from the start. No matter if you’re setting up your own new business or buying a business that already exists. Just consider offering all forms of payment; the more methods you provide to your customer, the more likely they are to convert.
And lastly, know your market. German consumers are conscientious buyers: they compare, shop around, and they’re well-prepared. They don’t often act on impulse.
So, in simple words: what should you do?
- Offer online payment services
- Include invoice payments
- Don’t ignore direct debit
- Understand debit cards
- Pay attention to cultural preferences
And the bottom line? To succeed in Germany, prioritize diverse, secure, and familiar payment methods. Make it easy for customers to pay how they want, and you’ll set yourself apart from the competition.
Capitalize on the Opportunities
The opportunities are huge in the German e-commerce market. With a significant growth potential and increasing use of online payment services, there has never been a better opportunity to offer your services and products to German consumers.
To make the most of your venture, take the time to research and invest in offering as many payment options to your customers as possible.
If you do, the likelihood of customers converting increases, as does your platform for growth in this exciting market.
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