Mobile payments have gained a foothold in Germany in recent years. The Bundesbank’s representative studies on payment behaviour in Germany, which are carried out at regular intervals, show that this is true of both smartphone payments at the point of sale (POS) and mobile payments between individuals (peer-to-peer, or P2P). Suitably equipped wearables, i.e. fitness wristbands or smartwatches, can also be used for payment in addition to smartphones. In the current Monthly Report, the Bundesbank’s experts determine what segment of the population is most likely to reach for their smartphone to make payments in Germany and how Germany compares with other countries in Europe in terms of the uptake of such payment methods.

They find that it is mainly younger people between the ages of 18 and 44, as well as respondents who shop or bank online and those who are open to technological trends that pay by smartphone more frequently than the respective comparison groups. “Demographic developments thus make it likely that the use of mobile payment methods will increase in the future”, the authors write. Trust in the responsible handling of personal data by providers of payment apps, i.e. digital wallets, is also reported to play a role.

Smartphone use for payments becoming more frequent

If the trend of increasing internet purchases and online banking observed in recent years continues, this could contribute to the expansion of mobile payment methods. The necessary conditions for this appear to have been met as contactless payment – whether with a physical card or a virtual card stored in a payment app – now enjoys widespread availability at POS throughout Germany. In addition, payments made by smartphone or wearable are fastest compared with other means of payment, taking an average of 14 seconds. This is also shown by a recent Bundesbank study (see link below). Mobile payments, however, still lag far behind cash and debit and credit cards. According to the report, only around 3% of transactions at the POS and 3% of P2P payments were made by smartphone in 2021.

Germany below average by European standards

At a share of 2.4% for mobile payments at POS, Germany occupies a mid-table position in Europe, albeit below the euro area average. Of particular note are the high percentages in Finland (6.4%) and the Netherlands (10.5%). One of the reasons cited by the Bundesbank’s experts for the low prevalence of mobile payments in Germany to date was “the late availability of the infrastructure needed to settle NFC-based payments and the cautious cooperation of banks and savings banks” with digital wallet providers. In particular, the prospect of soon being able to add the widely used girocard issued by all card-issuing institutions to the relevant digital wallets is likely to boost smartphone payments.