Germany remains a large and mature payments market, with high levels of payment card holding and usage. It is also one of the biggest online commerce markets globally, with high growth potential over the next few years. Despite this, the market is falling behind others in the region in terms of consumer adoption of new technologies such as mobile NFC and even contactless cards.
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How do German consumers use their payment tools, and how has this changed in recent years?
Which players are key in the debit, credit, and charge card spaces? How are they adapting to changes within the wider market?
How extensive are mobile, online, and contactless payments and where does future growth lie?
What impact is regulatory change having on the German payments sector, and how will it likely affect future market development?
The average German consumer is debt-averse, with only 29.2% of credit card holders revolving their balances, and only 35.0% of consumers owning any form of pay-later card. Considering the interchange caps soon to come into force, issuers should look to pay-later cards as an alternative revenue source.
Germany is the fifth-largest online commerce market globally, and while only 8% of the total online expenditure in the market was accounted for by m-commerce in 2013, this figure is expected to rise to 21% by 2018. Payment providers and merchants should therefore focus on optimizing not only their websites, but also payment tools, for mobiles.
NFC is currently very underdeveloped in the German market compared to other European countries. Awareness of both contactless cards and mobile wallets is rising, but consumers are not interested in the technology even when they are aware of it.