The Top Payment Methods in Germany: A Complete Guide for Businesses

Expanding to Germany means entering Europe’s second-largest e-commerce market, projected to reach €111.36 billion in 2025. Unlike markets where credit cards dominate, German consumers prefer bank-based payments like SEPA direct debit and bank transfers, valuing security and familiarity. When those options aren’t available, 27% of shoppers abandon their carts. Offering the right mix of payment methods at checkout removes that friction and improves conversion rates.

In this guide, we’ll break down the most used payment methods in Germany, helping merchants gain a clearer perspective on consumer preferences – including the rise of open banking alongside traditional bank payments – and how these payment methods are shaping the future of online transactions.

Most Popular Payment Methods in Germany

Understanding how Germans prefer to pay can help merchants tailor their checkout experience for maximum conversions. Here’s what currently dominates the market:

PayPal

For more than 25 years, PayPal has been a major driving force in digital payments. What began as Confinity in 1998 has evolved into a global network powering transactions in over 200 markets. In 2024, Germany ranked second worldwide in PayPal users, with 137.7 million users, making it one of the platform’s largest markets.

PayPal dominates the German e-commerce landscape, offering buyer protection, seamless checkout and strong brand recognition. A December 2024 study found that 57% of online payments in Germany were processed through PayPal, highlighting its role as a preferred payment method.

However, for merchants, high transaction fees remain a significant drawback, impacting profitability despite its widespread adoption.

Debit and Credit Cards

Germany remains a cash-reliant country, but debit card usage has steadily increased. With penetration expected to rise from 94.65% in 2024 to 95.98% in 2029, debit cards continue to strengthen their position as another top preferred German payment method. Now accounting for over 30% of point-of-sale (POS) transactions, they have become the go-to choice for everyday purchases.

While debit cards dominate, credit cards are slowly gaining traction. Usage is expected to grow steadily over the next few years, but they still account for less than 10% of in-person transactions. Even so, spending habits are changing—credit card payments have quadrupled in value over the past decade, jumping from €3.28 billion in 2012 to over €13 billion in 2023.

Debit cards continue to lead despite the rise in credit card transactions, as many consumers avoid the higher fees, slower processing and fraud concerns that come with credit-based payments.

Digital/Mobile Wallets

We can’t talk about popular payment methods in Germany without mentioning digital wallets. As of December 2024, they accounted for 65% of all e-commerce transactions, making them the most widely used online payment method in Germany.

With Apple Pay and Google Pay, consumers can pay online and in stores using a smartphone or smartwatch, eliminating the need for cards or cash. However, since most wallets are still linked to credit or debit cards, they inherit the same downsides – high processing fees, chargebacks and fraud risks.

New players are entering the market, offering alternatives to traditional card-based wallets. One example is Wero Wallet, which launched in Germany in July 2024 and is still in its early adoption phase. Initially focused on peer-to-peer transfers, it also supports cross-border payments between participating banks. As it develops, Wero plans to expand into e-commerce and point-of-sale payments, integrating additional third-party payment options.

Bank Transfer

Bank transfers are a widely used payment method in Germany, offering a free and reliable way to send money within the EU. Standard transfers take 1 to 3 days, but many banks now support instant transfers, sometimes for a small fee. Direct debit authorisation (SEPA-Lastschriftmandat) is also common for bills, taxes and subscriptions.

For years, Giropay was a key payment gateway in Germany, allowing customers to pay directly from their bank accounts using online banking credentials. It accounted for 10% of online checkouts, offering merchants instant payment confirmation. However, GiroPay has since been deprecated, shifting the focus toward newer bank transfer solutions.

Another widely used option was SOFORT Überweisung, which enabled instant bank transfers before being acquired by Klarna in 2014. It was later integrated into Klarna’s "Pay Now" service, losing its independence. Now, SOFORT is being fully phased out, and by March 31, 2025, businesses will no longer be able to accept SOFORT payments. Merchants previously relying on SOFORT will need to either switch to Klarna’s “Pay Now” service or adopt alternative instant bank transfer solutions to keep their checkout process seamless.

As SOFORT is discontinued, businesses should consider alternative payment solutions that ensure instant transactions without interruptions. Open banking solutions offer a seamless transition for instant bank transfers.

Open Banking

As technology drives new ways to pay, open banking is becoming a key part of Germany’s financial infrastructure – offering businesses a smarter way to handle payments while providing consumers with more flexibility through multiple payment options, real-time transactions and seamless account connectivity. At the same time, it enhances security by using bank-level authentication, reducing fraud risks and minimising reliance on card details, ensuring safer and more transparent transactions.

Germany’s open banking market is projected to grow rapidly, reaching €8.6 billion by 2030, with a 26% CAGR from 2024 to 2030. By 2028, instant open banking payments are expected to account for 5% of all transactions, offering a faster, more direct way to pay and expanding the role of online payment methods in Germany.

With German consumers favouring bank transfers and direct debits, open banking streamlines payments by removing intermediaries like card networks (Visa, Mastercard), payment processors (PayPal, Klarna) and acquiring banks – cutting costs and improving efficiency.

For consumers, it means faster, more secure payments without sharing card details. For businesses, it reduces chargebacks, lowers compliance costs and improves cash flow. Noda makes adoption effortless, offering real-time bank payments with no hidden fees.

Unlocking Faster Payments in Germany with Noda

Expanding into the German market requires a payment solution that keeps up with rising competition, meets evolving consumer expectations and adapts to rapid market growth. With 66.92% of Germans using online banking, businesses that use open banking can tap into a growing preference for direct, frictionless payments. Noda’s Open Banking solution enables this shift, offering a fast, cost-effective alternative that aligns with how German consumers prefer to pay.

By integrating with 2,000 banks across 28 countries, including Deutsche Bank, Commerzbank, Revolut, ING-DiBa, Volksbanken Raiffeisenbanken and many more across Germany, Noda enables seamless transactions – eliminating the friction of traditional payment methods.

• Instant bank payments with real-time settlements
• Lower transaction fees by cutting out unnecessary intermediaries
• Stronger security through PSD2 compliance, advanced fraud prevention and KYC tools
• Scalable infrastructure with e-commerce plugins and API integration

With open banking adoption accelerating, Noda helps businesses stay ahead in a market that values fast, secure and direct bank payments. Don’t let outdated payment systems slow you down – integrate Noda and optimise your checkout today.