Consumer Payments Country Snapshot: Germany 2016
Payment cards are used sparingly at the point of sale (POS), and the German POS network is among the least developed in Europe. The German maxim is “geld stinkt nicht” (literally “money doesn’t stink”) - consumers consider cash to still be the best available option due to a combination of ingrained consumer habits and the German cultural preferences for spending within one’s means. As a result, alternative payment methods are sharply limited in both usage and consumer interest.
Less than 10% of German consumers held a revolving credit card in 2015, and of those 80% paid off their balances in full each month. The opportunity for credit card revenue in Germany is thus sharply limited, and there would need to be a seismic shift in the German attitude to debt to change this.
German consumers used cash for 55% of all payments made in 2015. German consumers’ preference for cash is not tied to the convenience of its use - Germans prefer the anonymity, certainty, and above all control over personal spending afforded by cash. To change this, new payment tools are needed that provide the same benefits to consumers.
Germany is the third-largest e-commerce market in Europe behind only the UK (EUR156bn) and France (EUR72bn), although its population is much larger than either of those countries. This highlights that Germans are not nearly as engaged with the online channel as the French or British. The average German household spent a total of EUR1,648 online in 2016, compared to EUR2,419 in France and EUR5,605 in the UK.
Germany’s POS infrastructure is heavily underdeveloped for a European market, with more than 100 people for every POS terminal in 2015. Other Western European markets - even heavily cash-reliant ones such as Italy (one POS terminal per 30 people in 2015) - have much higher levels of POS penetration, with an average of one terminal per 45 people in 2015 among Western European markets excluding Germany.
The report Consumer Payments Country Snapshot: Germany 2016 examines the consumer payments market in Germany, considering payment cards, online payments, P2P payments, and newer payment technologies such as mobile wallets and contactless. This report also examines the main regulatory players in the German market.
In depth, this report provides the following -
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