Digital payment options available. - Banks plan to halt Giropay services by the end of 2024.
The demise of the collaborative online payment method, Giropay/Paydirekt of the German banks and savings banks, is imminent. At their annual general meeting on June 12, 2024, the shareholders of Paydirekt GmbH, with the agreement of their respective committees, have resolved to discontinue the Giropay payment option by the end of the current year. The final call on this issue is still outstanding from the authorities.
The joint undertaking, marketed under the Paydirekt label, which emerged as a potential rival to PayPal in the fall of 2015, failed to live up to expectations in terms of reach - neither from consumers nor from vendors. This state of affairs had not changed when the German financial sector consolidated its efforts in spring 2021 and combined the online payment methods Paydirekt, Giropay, and Kwitt under the Giropay brand.
There was evidently a lack of enthusiasm for investing extra resources in Paydirekt/Giropay, given the underwhelming market response, especially in light of the expeditious advancement of the European Payments Initiative (EPI) in Europe, which enjoys German support. Among the driving forces behind the European Payments Initiative (EPI) are the German Savings and Loan Association (DSGV), the German Bank, and DZ Bank. Shareholders in Paydirekt GmbH are Commerzbank and Deutsche Bank, representing the cooperative financial group, and the GIZS GmbH & Co. KG for the savings bank group.
Paypal leads the pack
The German financial industry had launched Paydirekt in the fall of 2015 over three and a half years after initial efforts to counter the US behemoth Paypal and the card companies Visa and Mastercard in the booming e-commerce sphere. Consumers were promised a swift and hassle-free way to make purchases online by linking their checking accounts. German banks upheld that, in this case, payment data would remain with the house bank on servers in Germany.
As late as April 2024, it was reported that the gas station chain Esso had come onboard as an additional vendor where payments could be made via Giropay through an app on a smartphone. Conversely, Paypal's standing in Germany has grown steadily over the years, and the company claims to have 35 million active accounts at present.
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- Despite the impending discontinuation of Giropay services by German banks and savings banks, including Paydirekt, by the end of 2024, PayPal continues to lead the online payment market in Germany with 35 million active accounts.
- The demise of Giropay/Paydirekt, a collaborative online payment method introduced by German banks in 2015 to rival PayPal and card companies, was announced at their annual general meeting in Frankfurt am Main on June 12, 2024.
- In spring 2021, the German financial sector consolidated its efforts by combining online payment methods like Paydirekt, Giropay, and Kwitt under the Giropay brand, showing a lack of enthusiasm for investing resources into Paydirekt/Giropay.
- German banks, including DZ Bank AG, which supports the European Payments Initiative (EPI), resolved to discontinue the Giropay payment option by the end of 2024, citing the underwhelming market response and rapid advancement of EPI in Europe.
- As of April 2024, Esso had joined the list of vendors accepting Giropay payments at their gas stations through a mobile app, while PayPal's dominance in the German finances sector continued to grow.
