When shopping online, German customers prefer to pay with Paypal. The online payment service overtook purchase on account – the leading payment method in Germany for years – for the first time in 2022 when it came to the share of sales in ecommerce.
Germans have much favoured payment on account (essentially bank transfer but traditionally once the goods are delivered) and so this is a massive change in consumer behaviour.
Paying with PayPal is quick and convenient for customers, but not exactly cheap for retailers. Paypal is offered almost everywhere in retail and offers the option of only paying for purchases after 30 days. Overall, the estimated e-commerce net sales for 2022 are EUR 85 billion. This means that sales are down slightly compared to the previous year (EUR 86 billion), partly due to the fact that shops have reopened.
– Radoslav Raychev, EHI study author
German Customers Payment Preferences
- 29.6 percent of online purchases were paid for with PayPal in 2022 (2021: 28.2 percent)
- In second place is now the purchase on account, which only accounts for 23.8 percent of sales (down 4.5 percentage points compared to the previous year)
- The direct debit procedure/direct debit (20.9 percent) and the credit card (12.1 percent) are in third place among the payment methods with the highest turnover in ecommerce.
- Giropay, the joint digital payment method of German banks and savings banks, is one of the climbers in the past year and climbed from 0.4 percent to 1.6 percent
The EHI Retail Institute “Online Payment 2023” study was conducted between February and March 2023 using an online survey. The panel includes data from 138 online trading companies (pure players and omnichannel retailers in Germany) from different industries and sales sizes with a total net sales of 47.4 billion euros in 2022.
What this means for retailers operating ecommerce sites in Germany is offering PayPal is now a pre-requisite and failure to do so is likely to have detrimental impacts on sales to German customers.
