PayPal faces more competition in Germany. With the digital Girocard, the local credit industry would like to offer an alternative to the well-known service providers. You can read exactly what this means for customers here.
Competition for PayPal: Girocard becomes an alternative
PayPal faces new competition in the form of the digital Girocard. March last year, the associations announced that they would merge their online payment methods Paydirekt, Giropay, and Kwitt under the Giropay brand. From 10 May 2021, consumers have been introduced to the new brand in a transition phase of several months. Public, cooperative, and private institutions want to enable consumers to pay online as easily as possible and quickly transfer money from account to account by merging payment methods – regardless of which bank the account is ultimately held with. Ultimately, the domestic banking sector wants to establish an alternative to Paypal and Apple Pay. “The market for payment methods is very competitive. It is all the more important – certainly with a view to a bit of national independence – that we as the German banking sector can offer customers a sustainable national payment method,” confirm the industry associations.
Almost the entire German banking sector is involved in the project
According to Paydirekt, the operating company responsible for merging the online payment processes of banks and savings banks in Germany, with the savings bank financing group, the cooperative financing group, Deutsche Bank, and Commerzbank, “almost the entire German banking sector with a total of implementation measures is approximately 1,500 banks and savings banks involved”. According to the information, the new Giropay process has about 7.5 million users so far. You can pay in this way in more than 27,000 web shops and in more than 1,400 municipalities.
When they started a year ago, Giropay and Paydirekt together covered about two percent of the German online payments market. According to statements made at the time, the domestic industry saw potential in the medium term to increase its market share to 50 percent. In comparison, US competitor PayPal has more than 29 million active customers in Germany, according to the latest information.
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