Germany's payment landscape is unlike that of most other major Western economies. While countries like the United Kingdom, Sweden, and the United States have rapidly shifted toward credit cards and mobile payments, Germany remains a market where cash, bank transfers (Ueberweisung), and the domestic Girocard debit system dominate. For businesses operating in the German market, understanding these payment preferences is essential for optimizing checkout experiences, managing transaction costs, and meeting customer expectations.
This guide covers the full spectrum of payment methods used in Germany as of 2026, including bank transfers, Girocard, PayPal, Klarna, SEPA direct debit, credit cards, and point-of-sale systems. It explains why each method matters, how businesses can implement them, and what they cost.
For information on setting up the business bank account that underpins these payment methods, see our guide on opening a business bank account in Germany. For broader financial planning, see our guide on business insurance requirements.
The German Payment Landscape: Key Statistics
Before examining individual payment methods, it is important to understand the overall payment landscape in Germany. The Bundesbank's regular payment behavior studies provide the most authoritative data.
| Payment Method | Share of POS Transactions (Volume) | Share of E-Commerce Transactions (Volume) | Trend |
|---|---|---|---|
| Cash (Bargeld) | ~35% | N/A | Declining slowly |
| Girocard (EC-Karte) | ~30% | N/A | Stable |
| Credit cards (Visa, Mastercard, Amex) | ~10% | ~15% | Growing slowly |
| PayPal | N/A | ~25% | Stable/growing |
| Bank transfer (Ueberweisung) | ~5% (POS via Sofort/Klarna) | ~20% | Stable |
| SEPA direct debit (Lastschrift) | N/A | ~15% | Stable |
| Buy now pay later (Klarna, etc.) | N/A | ~10% | Growing |
| Mobile payments (Apple Pay, Google Pay) | ~5% | ~5% | Growing rapidly |
Germany's cash usage, while declining, remains remarkably high for a wealthy industrialized nation. The Bundesbank's 2024 payment study found that cash was used for approximately 35% of point-of-sale transactions by volume, though its share of transaction value has fallen below 25% as larger purchases shift to cards. The cultural affinity for cash is rooted in German attitudes toward financial privacy, debt aversion, and a deep-seated skepticism of systems that track personal spending behavior. For businesses, this means that refusing cash entirely at a physical location will alienate a significant portion of customers, particularly older demographics and in rural areas.
Ueberweisung (Bank Transfer)
The bank transfer, or Ueberweisung, is the foundational payment method in German business. Virtually all B2B transactions, salary payments, tax remittances, and a substantial share of B2C e-commerce transactions are settled via Ueberweisung.
How It Works
The payer initiates a transfer from their Girokonto (current account) to the recipient's IBAN using their bank's online banking portal, mobile app, or in rare cases, a paper transfer form (Ueberweisungsformular) at the branch. Standard SEPA transfers settle within one business day. SEPA Instant Credit Transfers settle within 10 seconds and are increasingly supported by German banks.
For B2B
Bank transfer is the default payment method for B2B transactions in Germany. Invoices (Rechnungen) typically specify payment terms of 14, 30, or sometimes 60 days, and the customer pays via Ueberweisung. Offering Skonto (early payment discount, typically 2-3% for payment within 10 days) is a common incentive to accelerate receivables.
For B2C E-Commerce
Online retailers offering Ueberweisung as a payment option typically use real-time bank transfer services such as Sofortueberweisung (now Sofort by Klarna) or Giropay (integrated with Paydirekt since 2022). These services provide instant confirmation that the transfer has been initiated, allowing the merchant to ship immediately rather than waiting for the standard one-day settlement.
Costs
SEPA transfers within the eurozone are typically free or cost EUR 0.10-0.30 per transaction for business accounts. For businesses, the primary cost is not the transfer fee but the working capital impact of payment terms and the administrative cost of matching incoming payments to outstanding invoices.
Girocard (EC-Karte)
The Girocard, historically known as the EC-Karte, is Germany's domestic debit card system operated by the Deutsche Kreditwirtschaft (German Banking Industry Committee). With approximately 100 million cards in circulation, it is the most widely used card payment method in the country.
How Girocard Works
The Girocard is linked directly to the cardholder's Girokonto and debits the account immediately upon transaction. Unlike credit cards, there is no credit facility. The system uses PIN verification for in-store transactions and increasingly supports contactless NFC payments for amounts under EUR 50 (or with PIN for higher amounts).
Merchant Acceptance
For any business with a physical point of sale in Germany, Girocard acceptance is effectively mandatory. Transaction fees for merchants are significantly lower than credit card interchange fees:
| Fee Component | Girocard | Visa/Mastercard Credit | Visa/Mastercard Debit |
|---|---|---|---|
| Interchange fee | 0.2% (capped by EU regulation) | 0.3% (capped by EU regulation) | 0.2% (capped by EU regulation) |
| Acquirer/PSP fee | 0.05-0.15% | 0.1-0.3% | 0.1-0.2% |
| Total merchant cost | 0.25-0.35% | 0.4-0.6% | 0.3-0.4% |
| Per-transaction fee | EUR 0.05-0.10 | EUR 0.10-0.20 | EUR 0.05-0.15 |
The Girocard Transition
The Girocard system is undergoing a significant transition. Historically, Girocard operated as a purely domestic system with no international acceptance. To address this limitation, German banks have begun issuing co-badged cards that combine the Girocard system with an international scheme (typically Visa Debit or Mastercard Debit). This allows cardholders to use their card internationally while retaining the domestic Girocard routing for transactions within Germany.
For merchants, this transition means that POS terminals must support both the domestic Girocard protocol and the international Visa/Mastercard debit protocols. Modern POS systems handle this automatically.
PayPal in Germany
PayPal has established a uniquely strong position in the German e-commerce market. With approximately 32 million active accounts in Germany, PayPal is the most popular online payment method and a virtually mandatory offering for any online retailer targeting German consumers.
Why PayPal Dominates German E-Commerce
PayPal's success in Germany is driven by its role as a trust intermediary. German consumers who are reluctant to enter credit card details on individual merchant websites are comfortable paying through PayPal because it provides buyer protection, a familiar interface, and the ability to pay without sharing financial details with the merchant. PayPal Express Checkout, which allows one-click payment without leaving the merchant site, has further strengthened its position.
Merchant Costs
PayPal charges German merchants a standard fee of 2.49% plus EUR 0.35 per transaction for domestic payments. For micro-transactions (under EUR 5), a discounted rate of 5% plus EUR 0.10 applies. International PayPal transactions incur an additional 1.5% cross-border fee. While these fees are significantly higher than Girocard or bank transfer costs, the conversion benefit of offering PayPal often justifies the expense for online merchants.
PayPal's dominance in German e-commerce creates a challenging dynamic for merchants. The payment method that drives the highest conversion rate is also the most expensive in terms of transaction fees. For businesses with thin margins, optimizing the payment mix by promoting lower-cost alternatives (such as SEPA direct debit or Sofort bank transfer) while still offering PayPal can meaningfully improve profitability. Some merchants display cheaper payment methods more prominently in the checkout flow while keeping PayPal available as an option.
Klarna and Buy Now Pay Later (BNPL)
Klarna, the Swedish fintech company, has a strong presence in the German market through both its traditional Rechnungskauf (invoice payment) service and its newer buy-now-pay-later products.
Klarna Products in Germany
Rechnungskauf (Pay After Delivery): The customer receives the goods and an invoice, typically with 14 or 30 days to pay. Klarna assumes the payment risk, paying the merchant immediately. This is the most popular Klarna product in Germany because it aligns with the traditional German preference for receiving goods before paying.
Ratenkauf (Installment Payments): The customer pays in 3, 6, 12, or 24 monthly installments. Klarna pays the merchant upfront and collects the installments from the customer.
Sofort (Instant Bank Transfer): Klarna's Sofort service enables real-time bank transfer confirmation, allowing merchants to ship immediately. This is the most widely used real-time bank transfer service in Germany.
Merchant Fees
Klarna's merchant fees vary by product and merchant volume. Typical ranges are 2.5-3.5% plus a fixed fee per transaction for Rechnungskauf, 3-5% for Ratenkauf, and 1-2% for Sofort. The higher fees for invoice and installment payments reflect the credit risk Klarna assumes.
SEPA Direct Debit (Lastschrift)
SEPA Lastschrift (direct debit) is the standard method for collecting recurring payments in Germany. It is widely used for utility bills, insurance premiums, rent, subscriptions, and regular B2B supplier payments.
Setting Up Direct Debit Collection
To collect payments via SEPA direct debit, a business must obtain a Glaeubiger-Identifikationsnummer (creditor identifier) from the Deutsche Bundesbank. The application is free and processed online. Each payer must provide a written SEPA-Lastschriftmandat (direct debit mandate) authorizing the collections.
SEPA Core vs. B2B Direct Debit
| Feature | SEPA Core Direct Debit | SEPA B2B Direct Debit |
|---|---|---|
| Available to | Consumers and businesses | Businesses only |
| Mandate verification | Not verified by payer's bank | Verified by payer's bank before first collection |
| Refund right | 8 weeks (no reason required), 13 months (unauthorized) | No refund right once authorized |
| Pre-notification | 14 days before collection (or shorter by agreement) | 1 day before collection (by agreement) |
| Typical use case | Consumer subscriptions, utility bills | B2B recurring payments, rent |
Processing and Costs
Direct debit collections are processed through the business bank account. Most German business banks charge EUR 0.10-0.30 per direct debit transaction. The main risk for the collector is return/rejection of the direct debit (Ruecklastschrift), which typically incurs a fee of EUR 3-5 per rejection. For B2C businesses with high volumes of direct debit collections, managing rejection rates is an important operational consideration.
Credit Cards in Germany
Credit cards have a lower penetration in Germany than in most comparable economies. While Visa and Mastercard are accepted at major retailers, hotels, and international businesses, many smaller German businesses still do not accept credit cards, and a significant portion of the German population does not hold a credit card.
Market Reality
Approximately 40% of German adults hold a credit card, compared to 70%+ in the UK and 80%+ in the US. Credit cards are most commonly used for travel, online purchases at international retailers, and high-value transactions. They are rarely used for everyday purchases at supermarkets, bakeries, or smaller shops.
For businesses, the practical implication is that credit card acceptance is important for hospitality, tourism, international clientele, and premium retail, but it is not sufficient as a sole card payment method. The Girocard remains the primary card payment method for domestic consumers.
POS Systems for German Businesses
Choosing the right point-of-sale system is critical for physical retailers and service businesses in Germany. The POS system must support Girocard (mandatory), Visa and Mastercard (strongly recommended), contactless NFC payments, and ideally mobile payments (Apple Pay, Google Pay).
Popular POS Providers in Germany
| Provider | Terminal Cost | Transaction Fee | Key Features |
|---|---|---|---|
| SumUp | EUR 39-139 (one-time) | 1.39% (all cards) | No monthly fee, simple pricing, mobile-friendly |
| Zettle by PayPal | EUR 29-79 (one-time) | 1.39% (all cards) | PayPal integration, inventory management |
| CCV | Varies (lease or purchase) | 0.25-0.4% (Girocard), higher for credit | Professional terminals, high-volume suitable |
| Worldline (formerly Ingenico) | Lease: EUR 15-40/month | 0.2-0.5% (Girocard), 0.4-1.0% (credit) | Enterprise-grade, multi-location support |
| Adyen | Custom pricing | Custom (typically 0.1-0.3% + interchange) | Omnichannel, large merchants |
When selecting a POS system, pay close attention to the Girocard fee structure. Some providers like SumUp and Zettle charge a flat percentage regardless of card type, which simplifies pricing but means you pay the same rate for a low-cost Girocard transaction as for a higher-cost credit card transaction. For businesses with high Girocard transaction volumes (which is typical in Germany), a provider that offers separate, lower Girocard rates may be more economical despite a more complex fee structure. Running the numbers based on your expected payment mix before committing to a provider is highly recommended.
Practical Recommendations by Business Type
E-Commerce: Offer PayPal, Klarna (Rechnungskauf and Sofort), SEPA direct debit, credit cards, and optionally Apple Pay/Google Pay. PayPal should be prominently displayed for maximum conversion. For more on setting up your online business, see our company formation guide.
Physical Retail: Accept Girocard (mandatory), cash, contactless payments, and credit cards. Consider a modern POS system from SumUp or Zettle for simplicity, or CCV/Worldline for higher-volume operations.
B2B Services: Bank transfer (Ueberweisung) with standard payment terms is the norm. Set up SEPA direct debit collection for recurring client payments. Credit card and PayPal are rarely used in B2B contexts.
Hospitality: Accept all payment methods including cash, Girocard, credit cards (Visa, Mastercard, Amex for international guests), and mobile payments. Tip handling varies, with many German POS terminals now supporting tip amounts at checkout.
Mobile Payments: Apple Pay and Google Pay
Mobile payments through Apple Pay and Google Pay have grown rapidly in Germany since their respective launches. As of 2026, approximately 15% of in-person card transactions are initiated through mobile wallets, with the share significantly higher in urban areas and among younger demographics.
For merchants, accepting mobile payments requires no additional hardware or setup beyond having a contactless-enabled POS terminal. Apple Pay and Google Pay transactions are processed through the underlying Girocard, Visa, or Mastercard payment networks, so merchants who already accept contactless card payments automatically accept mobile wallet payments at the same fee rates.
The growth of mobile payments in Germany is notable because it represents a generational shift in a market traditionally resistant to digital payment innovation. While cash remains important for the foreseeable future, businesses targeting younger and tech-savvy consumers should ensure their payment infrastructure supports the full range of contactless and mobile payment methods.
Payment Compliance and Regulatory Considerations
Businesses accepting payments in Germany must comply with several regulatory requirements:
Kassensicherungsverordnung (KassenSichV): Since January 2020, all electronic cash registers and POS systems in Germany must be equipped with a certified Technical Security Device (TSE, Technische Sicherheitseinrichtung) that creates tamper-proof records of all transactions. Non-compliance carries fines of up to EUR 25,000. This requirement applies to all businesses that use electronic recording systems for cash and card transactions.
GoBD Requirements: All payment transactions, whether cash, card, or bank transfer, must be recorded in a GoBD-compliant accounting system. Digital payment records must be archived for 10 years in their original format.
PSD2 Strong Customer Authentication: For online card payments, the EU Payment Services Directive 2 (PSD2) requires Strong Customer Authentication (SCA) for most transactions above EUR 30. This means online merchants must support 3D Secure authentication protocols (Visa Secure, Mastercard Identity Check) through their payment service provider.
For compliance considerations related to payment processing, see our guide on German business laws and compliance. For data protection requirements that apply to payment data, see our GDPR compliance guide.
Frequently Asked Questions
Why do Germans prefer bank transfers and cash over credit cards?
Germany's preference for bank transfers (Ueberweisung) and cash has deep cultural and structural roots. The German banking system is built around the Girokonto (current account) and the Girocard (debit card), not credit cards. Historically, German consumer culture emphasizes financial prudence and avoiding debt, which makes credit cards less appealing. The Sparkassen and Volksbanken network provides universal access to debit-based payment infrastructure. Additionally, German data privacy sensitivities make many consumers wary of payment methods that track purchasing behavior. As of 2025, cash still accounts for approximately 35% of point-of-sale transactions by volume, though digital payments have grown significantly since the COVID-19 pandemic.
What is the Girocard and should my business accept it?
The Girocard (formerly EC-Karte) is Germany's national debit card system, linked directly to the cardholder's Girokonto. It is by far the most widely used card payment method in Germany, with approximately 100 million cards in circulation. If your business has a physical location in Germany, accepting Girocard is essentially mandatory for competitiveness. Girocard transaction fees for merchants are significantly lower than credit card fees, typically 0.2-0.3% of the transaction value. However, Girocard does not work internationally and is being gradually supplemented (though not replaced) by co-badged Visa and Mastercard debit card functionality.
Is SEPA direct debit commonly used for B2B payments in Germany?
Yes, SEPA Lastschrift (direct debit) is widely used for recurring B2B payments in Germany, including rent, insurance premiums, utility bills, subscription services, and regular supplier payments. There are two types: SEPA Core Direct Debit (for consumers and businesses, with an 8-week refund right) and SEPA B2B Direct Debit (for business-to-business only, with no refund right after authorization). Setting up SEPA direct debit collection requires a creditor identifier (Glaeubiger-Identifikationsnummer) from the Bundesbank and a signed mandate (Lastschriftmandat) from each payer.