German financial institutions plan to abandon Paydirekt payment services.
Paydirekt, intended to rival Paypal, ultimately failed to gain significant usage: Reports indicate that the German banking sector plans to discontinue the payment method Paydirekt. The "Sueddeutsche Zeitung" shared this information, citing sources within the industry. The banks and savings banks will reportedly shut down Paydirekt by year's end and begin winding it down then.
The payment service's spokesperson said, "There are ongoing discussions with shareholders regarding the future" of Paydirekt GmbH, the company that operates the service. They will provide more information once "final decisions" have been made.
Paydirekt launched in 2015 but never gained widespread adoption. In 2021, it merged with another bank-supported project called Giropay, but in 2022, the two combined methods held a market share of less than 10%. In comparison, Paypal processed nearly a third of all online purchases in Germany at the time.
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The decision to discontinue Paydirekt has led to uncertainty among its users, as they now need to explore alternative German payment methods for their bank transactions. Due to the shutdown of Paydirekt by the end of the year, many Germans will be forced to reconsider their preferred payment methods, potentially leading to a shift in market share. The abrupt end of Paydirekt's services, despite its early ambition to rival Paypal, highlights the challenges faced by local payment intermediaries in competing with established global players.
