Contactless 2021: Germany’s journey from cash country to contactless trailblazer

Germany is considered a world leader in innovation. Think about science, technology, consumer products and a very impressive list of high-quality car brands. The country is synonymous with product excellence and expertise. But surprisingly, when it comes to payments, its progress has not been quite as remarkable.

Until recently, the motto of German consumers and small business owners was ‘cash is king’. Like it’s European near neighbour Italy (see our Contactless 2021 focus on Italy), the German market has a long history of cash dominance. When it comes to money, the nation’s culture is considered conservative, preferring to trust in a system it can physically see, rather than relying on a form of intangible settlement.

However, the onset of the coronavirus pandemic has changed things dramatically, and for the first time, cash payments have been actively discouraged. Like countries all over the world, Covid-19 has accelerated changes in payment behaviour in a way that none could have predicted.

Contactless is the new ‘must have’ method of payment acceptance

In January 2020, around 40% of transactions in Germany were contactless. But by the end of the year, this figure had grown to just over 60% with revenue more than doubling to 97 billion euros compared with 41 billion in 2019.

The increase in the contactless limit from 25€ to 50€ in 2020 was an early game changer, with acceptance changing within just a few weeks on most payment terminals in the German market. Large retailers jumped on the opportunity, with discount chains Rewe, Edeka, Aldi, Lidl, Metro Group, and drugstores including dm, Rossmann, and Müller Drogerie moving quickly to encourage their customers to go cashless and focus on contactless payment. Flyers, stickers, and posters promoted the method at the POS and merchants implemented ‘card only’ checkouts.

© EURO Kartensysteme GmbH

The changes impacted small business too, with retailers who had previously offered no card payment at all, moving quickly to install new terminals. This trend was led by bakery shops, where previously card payments were simply not present, but which can now be found everywhere.

The result of this new uptake saw the number of active payment terminals in the German market reach 922K in the first half of 2021, an increase of 6.8% on the previous year. With a market share of more than 50%, Ingenico’s devices were instrumental in contributing to this availability and we moved swiftly to support our customers in accepting the higher contactless limit.

Interestingly, to make full use of the PSD2 limits, most of the bank cards were issued with the accumulated limit for contactless cards, as opposed to the rule widely adopted in other countries, such as the UK, whereby the number of transactions without PIN entry are limited to five. In doing so, Germany maximised the use of contactless cards for a higher number of small purchases without the need to enter the PIN.

girocard has been the retail winner at the checkout

Contactless payment has helped to meet both customers’ and retailers’ desire for distance and hygiene at the moment of purchase. One of the big winners of this behavioural change has been girocard. With an increase in the share of sales of 6.5%, or EUR 24.8 billion, girocard has dominated the payment mix of stationary retail[1], well ahead of credit cards (plus 0.9 percentage points).

With more than 100 million cards issued, girocard is the most common debit card in use in Germany, and with almost 5.5 billion transactions in 2020, it reached a new high at the checkout[2]. This is a billion more transactions than the previous year.

The most recent figures released by Deutsche Kreditwirtschaft (DK)[3], show contactless usage continuing to increase. In the first half of 2021, which was dominated by another lockdown, girocard transactions rose by 4.7% year on year to 2.71 billion, representing turnover of 114 billion. The boost in payments with girocard contactless saw 64% of all transactions using this payment method compared, with 46% in the first half of 2020.

Moving to mobile payment is a key trend

Contactless payment processes also include paying on a smartphone with the digital girocard. This is another key driver of payment trends in Germany, with mobile payments increasing towards 10% of all contactless transactions. The use of smartphones, which offer extra elements of security, are becoming more established and it is anticipated that they will be used more frequently at retail checkouts.

The growth in smartphone payments was accelerated in part by Sparkassen who, with a 50% share of issued cards, started to offer the girocard with Apple Pay. This was considered a big breakthrough in payment acceptance and girocard and credit card wallets have become a common feature with the major banks. Most Sparkassen, Volksbanken Raiffeisenbanken and some private banks now offer mobile payment with the digital girocard in Android smartphones as well as with Apple Pay for iPhone users.

Contactless payment is becoming relevant for all ages, not just the younger generations

Research by the Initiative Deutsche Zahlungssysteme[4] (IDZ) has shown that the typical ‘smartphone payer’ in Germany tends to be male, between 16 and 29 years old and prefers to pay amounts under 25 euros. Almost everyone (93%) paying by phone finds the method easy to use, and most interestingly, 71% would have no conversion problems if cash were to be abolished, distinguishing them from the 37% of card users and only 4% of cash users who would be comfortable with this scenario.

These results corroborate earlier research by IDZ which found that the younger the consumer, the higher the use of cashless payment. And yet, the older generations are catching up with this trend and increasing their use of contactless technologies too.

Almost every second person in Germany wants to pay by card or smartphone, even after the pandemic, with 44% of the population confirming that they will continue to use digital payment after the crisis.

In simple terms, people have never paid less with cash in Germany, and the trend looks set to continue. As these new payment behaviours embed themselves, Ingenico will continue to be at the forefront of contactless innovation, supporting its customers and keeping consumers safe.


[1] Cards as a crisis winner, EHI Retail Institute

[2] girocard used more often than ever before - Die Deutsche Kreditwirtschaft

[3] girocard half-year figures 2021

[4] Allensbach study by the Initiative Deutsche Zahlungssysteme



Jürgen Göbel

About the author

Jürgen Göbel, Business Development Director – DACH Region, for Ingenico, a Worldline brand

Jürgen Göbel has worked in the card payment industry for over 25 years. Since joining Ingenico in 2015, Jürgen has been responsible for Business Development and Product Marketing in the DACH region and is a Board member of the German Payment System Initiative, IDZ Berlin. He is also a member of the Executive Committee of the European Vending Association (EVA) in Brussels.

About Worldline

Worldline [Euronext: WLN] is the European leader in the payments and transactional services industry and #4 player worldwide. With its global reach and its commitment to innovation, Worldline is the technology partner of choice for merchants, banks and third-party acquirers as well as public transport operators, government agencies and industrial companies in all sectors.

Powered by over 20,000 employees in more than 50 countries, Worldline provides its clients with sustainable, trusted and secure solutions across the payment value chain, fostering their business growth wherever they are. Services offered by Worldline in the areas of Merchant Services; Terminals, Solutions & Services; Financial Services and Mobility & e-Transactional Services include domestic and cross-border commercial acquiring, both in-store and online, highly-secure payment transaction processing, a broad portfolio of payment terminals as well as e-ticketing and digital services in the industrial environment. In 2019 Worldline generated a proforma revenue of 5.3 billion euros.