According to the article recently published by EHI, the research, education, and consulting institute focused on the retail industry and its partners, German consumers have clearly preferred using PayPal as their primary payment method in online shopping. In a significant development, PayPal has surpassed invoice payments, which have long been the leading payment option in the country. This information comes from the latest EHI study titled "Online-Payment 2023." The study sheds light on the changing landscape of e-commerce payments and highlights the convenience and speed of PayPal as the key factors driving its popularity among customers. However, it is worth noting that merchants may incur higher costs when using PayPal. Despite this, PayPal's widespread acceptance in the retail sector and its deferred payment option of up to 30 days have contributed to its increased market share.
The study estimates that the net revenue generated from German e-commerce in 2022 amounts to approximately 85 billion euros, indicating a slight decrease compared to the previous year's figure of 86 billion euros. This decline can be attributed, in part, to the reopening of physical stores, which has impacted online sales to some extent.
In terms of specific payment methods, PayPal has emerged as the frontrunner, accounting for 29.6 percent of all online purchases in 2022, a notable increase from 28.2 percent in the previous year. In contrast, invoice payments have slipped to second place, representing 23.8 percent of the market share and experiencing a decline of 4.5 percentage points compared to the previous year. Direct debit/bank transfers occupy the third position with a market share of 20.9 percent, while credit cards hold the fourth spot at 12.1 percent. Notably, Giropay, the collaborative digital payment solution offered by German banks and savings banks, has witnessed a significant rise, surging from 0.4 percent to 1.6 percent.
Another prominent trend in the payment industry is the "Buy now, pay later" (BNPL) concept, which allows customers to defer immediate charges and opt for consumer credit while shopping online. The EHI study reveals that 76.9 percent of surveyed merchants currently offer such BNPL services in their online stores. Among the various BNPL options, invoice payments ranked as the most frequently used method, accounting for 67 percent, followed by PayPal at 43 percent and installment financing at 24 percent.
The comprehensive "Online-Payment 2023" study will provide more information and will be available for free to EHI members.
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