German customers are rather more conservative when shopping online. This country offers lots of different payment methods: online payment services, credit/debit cards, direct debits, prepaid cards, etc. If we take a closer look at which ones are doing better in popularity, we can see that online payment services are dominating as of right now.
Online payment services refer to digital platforms and systems that facilitate electronic transactions over the Internet. These services enable individuals and businesses to make payments, transfer funds, and conduct financial transactions without the need for physical cash or checks. They are becoming increasingly popular among new generations.
For example, if we look at the survey below, only 37% of Germans make payments by debit card, much less than online payment services, which are used by some 66% of German consumers.
But for a company, it is best to invest in getting as many payment options as possible, as doing so increases the likelihood of customers converting and the platform for growth in the market.
In the aforementioned survey, we can look at the top three. In the ranking of most common online payments by type in Germany as of June 2024, the podium is occupied by:
- online payment services – 66%
- invoices – 52%
- direct debits – 46%
Why are they so popular in Germany?
Due to their convenience and efficiency. Germans value secure and reliable financial transactions, and these methods offer just that. They streamline payments, reduce the need for physical cash, and align with the nation’s preference for efficient and secure digital transactions.
We’ve gathered the most significant payment providers in the DACH market. Keep reading to familiarize yourself with them and choose the best ones for your online store.
Top payment providers in the DACH region
PayPal
PayPal is an online payment system that enables global money transfers and transactions. Users can link their bank accounts, credit cards, or debit cards to their PayPal account, and even maintain a balance within the platform. It presents a secure and convenient way to make purchases, send money, and manage finances. With PayPal, you can shop online without repeatedly entering card details, split bills, send money worldwide, access credit options, and even explore cryptocurrency. This payment provider is among the top providers in Germany, Switzerland, and Austria.
Below are the biggest e-commerce payment brands in Germany as of June 2024:
Klarna
Klarna is a payment service that allows shoppers to buy items online at their favorite stores, check out with Klarna, and enjoy the flexibility to pay later. Klarna features exclusive deals, rewards, and a store directory for a wide range of products. It also includes a browser extension and a mobile app for convenient shopping and payment management. Klarna aims to make the shopping experience smooth by offering flexible options for payment.
Amazon Pay
Amazon Pay is an online payment solution from Amazon designed for companies to accept payments from customers using their Amazon accounts. It facilitates a secure and convenient way for customers to make purchases on various websites and platforms by using their Amazon credentials. This service aims to enhance shopper engagement, increase brand visibility, and improve the checkout experience for both customers and businesses.
Google Pay
Google Pay is a secure digital payment platform from Google that lets users make online and in-store payments, send money to others, and store their payment information for quick and convenient transactions. It boasts features like tap-to-pay, autofill for card details, and built-in security measures to protect users’ financial information. Google Pay is designed to deliver a convenient and safe way to manage payments across various devices and platforms.
Apple Pay
Apple Pay is a mobile payment service from Apple Inc. that helps users make payments in person, in iOS apps, and online. It comes with great convenience and gives users the ability to make one-button payments on their iOS phone, laptop, or watch. It is particularly popular in the US, where it is the leading mobile payment platform, and has also gained significant market share in Canada or Japan. As far as the DACH region is concerned, it has a significant number of fans, with more and more shoppers using Apple Pay for online payments.
Giropay
Giropay is an online payment system introduced in 2005. With its assistance, users can make real-time bank transfers through online and mobile channels. It is very popular in Germany, where it enables shoppers to pay for goods or services directly from their online bank accounts. Giropay offers a high level of security through the use of two-factor authentication and is accepted by a wide range of online merchants. What’s interesting, Giropay is owned by Paydirekt GmbH, which is also included in our list.
TWINT
TWINT is a mobile payment app that originated in Switzerland, founded in September 2016. It makes it possible to securely connect bank accounts or cards to the app for making payments. Twint has gained significant popularity in Switzerland and is recognized as the country’s most popular mobile payment method. It has also been ranked among Switzerland’s top ten most popular brands. It provides peer-to-peer transfers, online payments, and in-store purchases through QR codes.
In the case of Switzerland, below are the biggest e-commerce payment brands in this country as of June 2024:
Masterpass
Mastercard Click to Pay, also known as Masterpass, is a digital payment service that facilitates secure online transactions quickly. Customers can pay by simply logging into their accounts. This speeds up the checkout process with just a few clicks, as Masterpass remembers payment details. Additionally, Masterpass can be used in stores with compatible contactless point-of-sale devices. This service is popular in regions with high adoption of digital payment technology, like Germany.
Paydirekt
Paydirekt is an online and mobile payment method in Germany, launched in 2015 as a joint initiative by several major German banks. It was designed to facilitate secure payments for online transactions and merge features from the earlier-mentioned Giropay system. It is particularly popular in Germany, where it is used for e-commerce transactions and offers consumers a safe way to pay using their bank accounts.
Afterpay
Afterpay is a financial company well known for its buy now, pay later (BNPL) program. It allows consumers to make purchases and pay for them in installments over a short period, without incurring interest if payments are made on time. It was founded in Sydney in 2015 and has become popular in countries including the United States, Australia, Germany, and the United Kingdom.
Eps Überweisung
Eps Überweisung, commonly known as EPS, is an online bank transfer payment method, really popular in Austria. It facilitates real-time payments for online shopping and is widely accepted by e-commerce platforms and services across the country. It is known for its simplicity and security. By utilizing the existing online banking infrastructure, EPS presents a seamless payment experience for both customers and merchants.
Speaking of Austria, below are the biggest e-commerce payment brands in Austria as of June 2024:
Skrill
Skrill is an online payment platform that facilitates convenient ways to pay online, transfer money globally in multiple currencies, and withdraw funds hassle-free. Users can make online payments without revealing their bank account or credit card details, ensuring privacy and security. It is accepted by leading gaming sites, offers VIP benefits, and is accessible via a mobile app for easy money management.
Alipay
Alipay is a third-party mobile and online payment platform established by Alibaba Group in February 2004 in Hangzhou, China. It is particularly popular in China, especially among younger, tech-savvy consumers, but it has its fans in Switzerland as well. Alipay has become an integral part of daily life for many users, as it delivers services such as money transfers, bill payments, and even investments. Additionally, its strong emphasis on security and convenience has contributed to its widespread adoption.
Paysafecard
Paysafecard is a prepaid voucher, a cash-based online payment method that operates using vouchers containing a 16-digit PIN code. Through it, users can make online transactions securely and easily without the need for a bank account or credit card. This method is popular in various countries due to its anonymity and convenience – particularly in Austria, where it is widely accepted across numerous online retailers and platforms.
Sofort
Sofort is a direct and secure bank transfer payment method primarily used in Europe, especially popular in countries like Germany, Austria, and Switzerland. It lets customers make online payments directly from their bank accounts. Klarna took over Sofort in 2014. While Sofort still existed as a separate payment method for a while, it’s now part of Klarna’s broader payment services. This integration helps users make instant bank transfers and has expanded Sofort’s reach as a payment method across various online merchants in Europe.
Stripe
Stripe is an online payment processing platform that facilitates electronic transactions for businesses. It includes tools that allow companies to integrate payment functionality into their websites and apps. It is known for its user-friendly interface. It enables businesses to accept a variety of payment methods, including credit cards, debit cards, and digital wallets.
Fondy
Fondy is a comprehensive payment gateway that caters to the need for secure and efficient digital transactions. It enables businesses to accept payments through multiple channels, including credit and debit cards, digital wallets, and local payment methods popular in the DACH region. With its robust security features and user-friendly interface, Fondy ensures a seamless payment experience for both businesses and customers, aligning perfectly with the German market’s demand for reliability and efficiency in online transactions.
Worldline
Worldline is a global payment service provider with a range of payment solutions for both merchants and financial institutions. They help businesses of all sizes accept payments in-store and online, facilitate cross-border transactions, and deliver services like issuing and acquiring. With a presence in over 170 countries, Worldline is a major player in the payments industry, processing billions of transactions annually. They also provide consulting services and solutions to help organizations adapt to evolving consumer behaviors and regulations.
Adyen
Adyen empowers businesses to accept payments securely and enhances revenue while reducing complexity. It boasts a wide range of payment methods tailored to customers’ preferences, from credit cards and bank transfers to digital wallets and mobile payments. Adyen leverages cutting-edge technology and data insights to optimize revenue and manage risk. It’s a versatile choice for businesses looking to streamline their online payment processes.
PostFinance
PostFinance is a financial institution based in Switzerland that provides a variety of services, including payment transaction solutions, financial management, personal financing, investments, retirement planning, and advisory services. It is particularly popular in Switzerland, due to its free app and a platform with a payment function for iPhones. Thanks to PostFinance, users can easily pay for their purchases and access their banking services.
Neteller
Neteller is a global payments platform and digital wallet that makes it easy to transfer money to and from merchants, including those in the forex trading and online gaming sectors. It provides the flexibility to pay using uploaded funds, a bank account, or debit and credit cards to make money management quick, easy, and secure. Neteller is particularly popular among online traders and gamers.
Trustly
Trustly is a Swedish banking company founded in 2008 that provides an online payment solution. It enables consumers and merchants to perform transactions directly from their bank accounts. It also simplifies online banking payments and is popular in Europe and the United States, facilitating in and out payments for various businesses.
Wise
Wise, formerly TransferWise, is an online money transfer service for individuals and businesses to send money internationally at a lower cost compared to traditional banks. It uses a unique system that minimizes transfer fees and helps users send money for as much as eight times less than bank charges. Wise is particularly popular in Europe, Australia, and North America, where people frequently transfer money across borders for various purposes.
Meta Pay
Meta Pay from Facebook is quite popular in Germany and Switzerland. It is a payment service that provides the ability to make secure transactions on platforms such as Facebook, Instagram, WhatsApp, and Messenger. It offers the option to link a payment card or account and facilitates quick purchases and money transfers. It is particularly popular among users of these social media platforms for its convenience in processing payments.
Paytm
Paytm is India’s leading payment app, with a range of financial services. It has a Paytm Wallet for easy in-store and online payments, UPI money transfers, and credit services like Paytm Postpaid. Additionally, Paytm features credit cards, banking services, investment options, insurance, and personal loans. It caters to businesses with payment solutions, in-shop payments, and business tools.
Other
The above list does not cover all payment providers in the DACH region, only the most popular ones. In addition to these, there are many e-commerce payment brands used by shoppers. Some of them are:
- Checkout.com
- Mollie
- Alviere
- GoCardless
- BlueSnap
- Cybersource
- Paymill
- Spreedly
- Payoneer
- Wise
- Razorpay
- Clearly Payments
- PaySimple
As you can see, there are a lot of payment businesses that operate in the DACH region. While choosing the best options, consider your target group and its preference, as well as the security and liability of a given system.
To increase customer experience, offer your customers at least a few payment methods and make the checking out process smooth and mobile-friendly.
