Global Expansion Report_Part 7 - Germany

A NUVEI REPORT SERIES

Global expansion guide to high growth markets Part 7: Germany

Content 01

Executive summary

02

Why Germany is a high-return expansion market

03

Market dynamics & growth outlook

04

Consumerexpectations&localizationrequirements

05

Payment landscape & checkout preferences

06

Go-to-market & operating considerations

07

Who is Germany ideal for?

08

Conclusion

09

Key takeaways on market size, cross-border openness, and the execution factors that drive conversion in Germany.

EU-scale demand, strong purchasing power, cross-border accessibility, and predictable infrastructure that supports stable, scalable growth.

eCommerce growth trajectory, the role of cross-border trade, competitive intensity, and where vertical opportunities are concentrated.

Price sensitivity, trust and risk aversion, delivery and returns expectations, UX preferences, and what “localization” needs to include.

A non-card-centric mix: PayPal-led wallets, invoice/BNPL norms, SEPA bank payments, and how payment choice shapes trust and conversion.

Regulatory enforcement and consumer protection, VAT and tax basics, logistics and returns standards, entry models (marketplace vs MoR vs local entity), and support / localization needs.

Best-fit business models and verticals, common friction points, and readiness indicators to assess launch viability.

A clear view on what winning in Germany requires, and the practical implications for prioritization and execution.

Methodology Global expansion guide to high growth markets

3

Executive summary Welcome to the seventh edition of Nuvei’s Global Expansion Guide.

These reports, curated specifically for merchants, focus on high-growth markets and how to plan effective entry strategies.

In this edition, we zoom in on Germany, one of the few markets where scale, cross-border openness, and non-card payment behavior intersect at maturity.

With eCommerce volumes projected to hit $300 billion by 2028, Germany offers immediate access to one of the largest online consumer bases in Europe. More importantly, demand is structurally accessible: crossborder transactions account for a significant share of the market, making Germany more open to international merchants than many similarly sized economies like Japan.

At the same time, conversion dynamics differ. German consumers are highly engaged online but more deliberate in how they purchase. Compared to many emerging markets where speed and convenience dominate, there is a stronger emphasis on price transparency, perceived risk, and control over how and when payments are made.

These preferences shape checkout expectations and play a central role in a German consumer’s purchasing decisions.

Germany’s openness to international brands is well established, particularly in digital and serviceled sectors. However, this does not remove the need for alignment.

Demand is readily available, but capturing it depends on how well merchants meet local expectations across pricing, payments, and the overall customer experience.

This creates a market dynamic where entry barriers are relatively low, but performance is closely tied to execution. Businesses that approach Germany with a clear understanding of its structural characteristics can access immediate scale, market maturity and stability. Those that rely on standard expansion strategies may find that demand does not translate quite as efficiently into conversion.

Germany is best understood not just as a large European market, but as a distinct operating environment, where success is determined less by presence, and more by alignment to consumer expectation.

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Why Germany is a highreturn expansion market Germany’s attractiveness as an expansion market is not just a function of size - it comes from the combination of scale, cross-border accessibility, and structural resilience that is difficult to replicate elsewhere in Europe.

Germany at a glance • Europe’s largest e‑commerce market, ~$300bn projected by 2028 • Exceptionally open to cross‑border merchants • Non-card payment mix drives trust and conversion • High demand, but conversion is executiondependent

Immediate scale, without market fragmentation Germany is the largest consumer market in the European Union, and the world’s third largest nominal GDP (between $4.4 - 5.4 trillion USD), offering nationwide scale within a single market.

eCommerce growth that outpaces the economy

Built for cross-border expansion

Germany’s eCommerce sector continues to expand steadily, even as broader economic growth remains subdued.

Germany stands out for its structural openness to international merchants.

This reflects a structural shift toward online consumption rather than short-term acceleration. Compared to higher-growth markets that may carry more volatility, Germany offers consistent, predictable expansion, making it well suited to businesses prioritizing long-term planning and stable returns.

For merchants, this simplifies expansion compared to regions where demand is spread across multiple smaller countries. Instead of building presence across several markets to achieve volume, Germany provides a single entry point with meaningful scale.

This is particularly relevant when compared to Southern or Central European markets, where growth often requires a patchwork of multicountry coordination.

Cross-border commerce is already deeply embedded across the market, particularly in digital and service-based sectors.

This lowers the barrier to entry compared to markets like the US or Japan, where domestic ecosystems dominate and localization requirements are more intensive.

For many merchants, this means Germany can be approached as an extension of existing European operations, rather than a fully standalone market entry.

296.1

E-commerce market

E-commerce CAGR 5.2%

ECommerce vs GDP growth: trend stability

New e-commerce value added:

1,5%

241.4

2024

2025

1,2%

2026 E-commerce

2027

2028

GDP

Global expansion guide to high growth markets

7

Infrastructure that enables consistency

What this means for merchants

Germany’s logistics, payments, and regulatory systems are highly developed, but more importantly, are also consistent and predictable.

Germany offers high return potential, but only for businesses that align with how the market operates.

In practical terms, merchants should approach Germany with:

This reduces execution risk once operations are in place. Delivery networks are reliable, payment systems are widely adopted, and regulatory frameworks are clearly defined.

Compared to markets where infrastructure gaps create variability in performance, Germany allows merchants to scale with fewer operational unknowns.

• A focused entry strategy, treating it as a primary EU market rather than a secondary test case • Cross-border readiness, leveraging existing European infrastructure where possible • Upfront operational alignment, particularly in payments, logistics, and compliance Germany rewards preparation more than speed. Businesses that invest early in aligning with local market dynamics can unlock a combination of scale, accessibility, and stability that is difficult to match elsewhere in Europe.

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Market dynamics & growth outlook

GDP growth vs eCommerce growth (2024–2028): divergence E-commerce grows from USD 241.4bn to USD 296.1bn

Germany e-commerce CAGR

Germany’s eCommerce market is defined not just by its size, but by the quality and structure of its growth.

While headline expansion remains steady, the underlying dynamics, particularly the role of cross-border commerce and the divergence between verticals, are what shape the real opportunity for merchants.

1,5% 1,2%

E-commerce

Steady trajectory in a low-growth economy Germany’s broader economic outlook remains relatively subdued, with GDP growth expected to stay below 1% in the near term, projected to reach 1.5% and 1.2% in 2027 and 2028, respectively. In contrast, eCommerce continues to expand at a materially faster pace.

Between 2024 and 2028, the market is projected to grow at a compound annual rate of 5.2%, adding approximately $55 billion in new transaction value.1

This divergence highlights a structural shift: online channels are capturing an increasing share of consumer spending, even in periods of macroeconomic constraint.

For merchants, this translates into a reliable growth environment where digital performance is less tied to short-term economic cycles and more driven by long-term behavioral trends.

Cross-border commerce as a structural driver One of the most defining characteristics of Germany’s eCommerce market is the scale and persistence of cross-border transactions.

This is not a temporary effect driven by pricing arbitrage or specific platforms.

PCMI | 2 PCMI | 3 PCMI

GDP

Germany’s online market adds $54.7bn in transaction value between 2024 and 2028, materially outpacing the broader economy.

In 2025, cross-border commerce accounted for ~60% of total eCommerce volume - equivalent to nearly $133.3 billion.2 This share is expected to remain broadly stable through 2028, with crossborder growing slightly faster than domestic transactions.

1

5.2%

Instead, it reflects: • Deep integration within the EU Single Market • Mature cross-border logistics networks • High consumer trust in international merchants For international businesses, this creates a fundamentally different entry dynamic compared to more domestically concentrated markets.

Germany is not only large; it’s structurally ‘outward-facing' and open. However, this openness varies significantly by sector.

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Digital-first verticals continue to edge upward as Germany’s enterprise and entertainment spending shifts to recurring, platform-led models.

Vertical variation: where growth is concentrated While overall market growth is steady, performance varies widely across verticals, with clear implications for expansion strategy.

Large but more competitive segments: • Online retail (42% of total eCommerce) • Online travel (~33%)

SaaS has grown from 5% to 6% share (2025), led by global providers such as Microsoft and Salesforce; streaming is mature and stable at ~3% with players like Netflix, Amazon Prime Video, and Spotify; and gaming is expected to rise from 2% to 3% by 2028, driven by mobile adoption and in-game monetization.3

Highcross-border,digitalfirst sectors: • Gaming (~95% cross-border) • SaaS and streaming (~85%)

Gaming

Retail

Delivery

SaaS

Streaming

Travel

Other

Cross-border

95%

20%

60%

85%

85%

76%

60%

Domestic

5%

80%

40%

15%

15%

24%

40%

Retail remains the largest segment by volume but is characterized by intense competition from both domestic leaders and global platforms. Travel, meanwhile, benefits from strong demand and high digital adoption, though platform concentration remains a factor.

Travel is Germany’s second-largest online segment (around one-third of eCommerce), underpinned by strong domestic and outbound tourism and high digital booking penetration.

Total e-commerce 2025 USD 133.3.bn

• SaaS (growing share, driven by enterprise digitalization) 2028 USD 153.9bn

• Gaming (increasing monetization and engagement)

Domestic value 2024 approx. USD 116.6bn

Overall, travel’s slightly declining share reflects faster growth in other digital services and subscription models, not weakening demand.4

Emerging and fast-evolving segments:

2028 USD 296.1bn

Cross-border value 2024 USD 124.8bn

OTAs account for over 30% of overnight stays, led by Booking.com (69.5% OTA share), followed by HRS (12.7%) and Expedia (11%). Booking’s dominance is now being challenged both legally - after an EU court ruling against its parity clauses and a subsequent pan-European hotel collective action—and competitively, as players such as Trip.com expand in the market.

2028 approx. USD 142.2bn

Cross-border adds $29.1bn in new value by 2028, underscoring how structurally embedded international commerce already is in Germany.

4

PCMI

• Ride-hailing and delivery (stable but expanding into adjacent categories like groceries)

Notably, retail and travel are gradually losing share. This is not due to declining demand, but because digital services and subscription-based models are growing faster.

Ride-hailing and delivery apps are another interesting market vertical.

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Representing a steady ~6% of German eCommerce, the industry is supported by urban density, high smartphone usage, and strong food-delivery adoption in major cities.

Competitive intensity and market maturity

Competition is intensifying in both mobility and delivery: Uber faces close rivalry from Freenow and Bolt, alongside digitally enabled taxi operators operating under evolving rules (including the 2021 Passenger Transportation Act and ongoing friction around the “return-to-base” requirement).5

Domestic platforms such as Otto, Zalando, and MediaMarkt maintain strong positions, while global players like Amazon continue to dominate overall market share.

In food delivery, the postpandemic market has shifted from consolidation to renewed competition, led by Lieferando (Just Eat Takeaway.com) with Uber Eats and Wolt also active, while expansion into adjacent categories such as groceries is widening the segment’s growth potential.

This competition is especially visible in retail, where aggressive pricing strategies and high marketing spend are driving rapid growth for newer platforms.

Germany’s maturity and high competition is shown particularly in core segments like retail.

about where and how that growth is captured.

• Cross-border demand is strong and sustained, lowering barriers to entry for international merchants

Digital verticals such as SaaS, streaming, and gaming are less constrained by local competition and more influenced by global market leaders, making them structurally more accessible for cross-border expansion.

For merchants, this creates a dual reality:

Similarly, new entrants - particularly disruptive, low-cost international platforms like Temu and Shein - are reshaping pricing dynamics and increasing competitive pressure.

• Growth is increasingly concentrated in digital and service-based verticals • Core sectors like retail offer scale, but require differentiation to compete effectively • Market maturity means that execution, not just entry, determines success

• High competition in physical goods and marketplace-driven sectors

In fact, according to the German Retail Federation (HDE), the two platforms together generate around EUR 3.3 billion in sales in Germany (2025), driven by aggressive pricing and strong online marketing.6

Merchants that align their strategy with these structural dynamics will be best positioned to capture Germany’s next phase of eCommerce growth.

• Greater accessibility in digital and service-based categories

What this means for merchants Germany’s growth story is not about rapid digital expansion alone, but

Retail

Travel

Delivery

SaaS

Streaming Gaming

2025

42%

35%

6%

6%

3%

2%

2028

41%

34%

6%

6%

3%

3%

SaaS

Gaming Streaming

high logistics complexity

Retail and travel remain the largest categories, but faster growth is coming from digital services, especially SaaS and gaming.

5

PCMI | 6 PCMI

low logistics complexity Retail

Travel

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Consumer expectations & localization requirements Germany’s eCommerce opportunity is shaped as much by consumer mindset as by market size. Shoppers are digitally mature and highly engaged, but also deliberate, priceconscious, and risk-aware.

For merchants, success depends on understanding a key dynamic: German consumers are open to new brands but only when trust, transparency, and value are clearly established.

Price sensitivity and value-driven behavior German consumers are among the most price-sensitive in Western Europe. Purchase decisions are highly considered, with shoppers actively comparing offers across multiple platforms before committing. Price is cited by 19% of consumers – taking first place - as the main driver of online purchases in the DooFinder Online Consumer Landscape Study 2025, followed by access to a larger product variety (14%) and convenience, including the ability to shop anytime and anywhere (13%).

Promotions, discounts, and free shipping play a central role in conversion, and shoppers are highly responsive to perceived value.

This behavior also influences basket dynamics. Many consumers actively add items to reach free shipping thresholds, making pricing strategy and promotion design critical levers for increasing average order value.

For merchants entering Germany, competitive pricing is not optional; it is a baseline.

Trust, risk aversion, and brand loyalty Trust is the defining factor in German eCommerce behavior.

Consumers tend to be cautious, particularly when purchasing from unfamiliar merchants. This is reflected in strong preferences for payment methods that reduce risk (such as invoice-based payments), as well as in expectations around clear policies and reliable delivery.

However, once trust is established, German consumers are notably loyal. Early adoption matters because shoppers in general are less likely to switch providers once they have had a couple of positive experiences with a brand or platform.

This creates both a challenge and an opportunity: • New entrants must work harder to earn initial trust • But successful onboarding can lead to long-term customer retention Trust signals extend beyond the transaction itself. Transparency in pricing, clear return policies, and visible customer reviews all play a critical role in influencing purchase decisions.

“Germans are loyal once they trust a brand or platform, and first-mover advantage matters a lot. If people adopt one solution early, they are reluctant to switch.

They are also very conscious of consumer protection, regulation, and sustainability.

Environmental and labor standards matter, and there are many active organizations that monitor corporate behavior.”

Anel Spahovic

VP of Commercia, Nuvei

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Top purchase drivers

Behavior also varies significantly by generation:

Price

19% Larger product variety

14%

Convenience / shop anytimeanywhere

13%

Price is the single biggest purchase driver, cited by 19% of consumers.

Digital behavior and the rising role of AI in discovery German consumers are increasingly sophisticated in how they discover and evaluate products.

A growing share of shoppers, around 40%, now use AI-powered tools to search for and compare products. This reflects a broader shift toward more efficient, datadriven decision-making.7

7

• Millennials are the most active online buyers and account for a disproportionate share of eCommerce volume • Gen Z relies heavily on AIdriven recommendations, social platforms, and voice search • Older consumers tend to favor traditional search engines and product reviews For merchants, this means that discovery strategies must be diversified, combining traditional search optimization with emerging AI and social-driven channels.

Delivery, fulfilment, and UX expectations Operational execution is a critical part of the customer experience in Germany.

Delivery expectations are high, particularly around speed, reliability, and transparency. According to YouGov’s Online Retail 2025 study, 66% of consumers consider fast delivery important when choosing where to shop online, rising to 71% among Gen Z and Millennials.

DooFinder Online Consumer Landscape Study 2025 (n>2,000 shoppers), | 8 YouGov Online Retail 2025 study

Reflecting germans’ price focus, however, only 42% say they would pay extra for express or same-day delivery; relatively few are willing to pay extra for express options.

YouGov finds that: • 72% of German consumers expect precise delivery-time information at checkout • 79% pay special attention to free-shipping offers • 65% add items to their basket to reach the minimum order value. Free shipping, therefore, not only helps merchants close sales but also increases basket size.8

Returns are also an important part of the experience. Germany’s strong consumer protection framework, including a standard 14-day return window, reinforces expectations for simple, hassle-free returns.

From a UX perspective, clarity and completeness are critical.

Consumers expect: • Transparent pricing (no hidden costs) • Clear product information • Localized communication throughout the journey

Shopping behavior by generation + AI discovery Millennials

GenZ is close behind in AI-led discovery, relying more on voice search and recommendation feeds

Older generations

rely more on traditional search and reviews

AI is already mainstream in discovery: 40% of shoppers use AIpowered tools when searching for products.

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Only

Sustainability: Important, but conditional

sustainability should be integrated into the value proposition, but not positioned at the expense of price or convenience.

Sustainability is an established consideration in Germany, but its influence on purchasing decisions is nuanced.

What this means for merchants

According to YouGov, 33% of german shoppers actively consider sustainable shipping or packaging options, compared with around 30% of the European average and 27% in the US. Still, only 14% are prepared to pay extra for climate-neutral delivery.

Adoption increases sharply when trade-offs are removed: 48% favor sustainable options at no additional cost, 41% support reusable packaging, and 37% favor combined deliveries.

Many consumers are receptive to: • Reusable packaging • Consolidated deliveries • Climate-neutral shipping (if included at no extra cost) In practice, sustainability acts more as a differentiator and trust signal than as a primary purchase driver.

For merchants, this means

To succeed in Germany, localization must go beyond language.

Merchants need to align with a consumer base that expects:

42%

79% pay special attention to free-shipping offers

would pay extra for express or same-day delivery

72%

expect precise delivery-time information at checkout

• Competitive, transparent pricing

66%

consider fast delivery important

• Reliable and clearly communicated delivery • Familiar and trusted payment options • Strong post-purchase experience, including returns Equally important is the ability to build trust quickly through consistent execution across every touchpoint.

Germany rewards merchants that combine operational excellence with customer-centric design. Those that fail to meet these expectations may struggle to convert, regardless of brand strength or product quality.

71%

of Gen Z and Millennials say fast delivery is important

65%

add items to basket to reach the minimum order value for free shipping

German shoppers want delivery to be fast, transparent, and ideally free - but are less willing to pay a premium for speed.

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Payment landscape & checkout preferences Germany’s payment landscape is one of the most distinctive among advanced eCommerce markets.

Unlike countries such as the US or UK, where cards still dominate online transactions, Germany is defined by a diverse, non-card-centric ecosystem shaped by long-standing consumer habits and a strong preference for control and security.

For merchants, this is not simply a matter of adding alternative payment methods, it requires a fundamentally different approach to checkout design.

A fragmented, non-card-centric market Germany’s eCommerce payment mix reflects a balance between digital innovation and deeply rooted financial behaviors.

In 2024, no single payment method dominates9:

31%

Digital wallets

22% Buy now, pay later (BNPL)

9

20% Bank transfers (A2A)

13%

Debit cards

11%

Credit cards

PCMI | 10 https://finance.yahoo.com/news/germany-cards-payments-market-report-140500939.html#:~:text=Germany’s%20cards%20and%20payments%20industry,environment%20for%20growth%20and%20innovation.

Payment method volumes (Share % / $Bn) 2024

2025

2026

2027

2028

Buy Now Pay Later

22%

22%

21%

21%

21%

Credit Card

11%

11%

11%

10%

10%

Debit Card

13%

13%

13%

13%

13%

Digital Wallet

31%

31%

31%

31%

32%

Bank Transfers

20%

21%

22%

22%

23%

Cash-based

2%

2%

1%

1%

1%

Other

1%

1%

1%

1%

1%

2024

2025

2026

2027

2028

CAGR

Buy Now Pay Later

$52.2

$55.4

$57.9

$60.2

$61.4

4.1%

Credit Card

$27.1

$28.1

$28.9

$29.7

$30.3

2.8%

Debit Card

$31.7

$33.3

$34.8

$36.3

$37.6

4.4%

Digital Wallet

$74.8

$80.1

$84.9

$89.6

$93.6

5.7%

Bank Transfers

$48.3

$53.6

$58.7

$63.7

$67.5

8.7%

Cash-based

$4.8

$4.5

$4.0

$3.6

$3.1

-10.5%

Other

$2.4

$2.5

$2.5

$2.6

$2.6

1.6%

This contrasts sharply with markets like the UK, where cards typically account for the majority of online payments, or the US, where credit cards underpin both payments and consumer incentives.

However, usage rates do not keep pace. Instead, consumers gravitate toward payment methods that:

In Germany, card ownership is high; 94% of over-15s hold a debit card and 56% own a credit card – much like bank account penetration (98.3%).10

• Are directly linked to bank accounts

• Minimize perceived risk • Provide post-purchase control

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Digital wallets: Scale driven by Paypal

BNPL: A legacy behavior, not a fintech trend

Digital wallets are the largest payment category in Germany, accounting for 31% of eCommerce transactions (around USD 74.8bn in volume).6

Germany’s high adoption of BNPL (supporting 22% of all eCommerce payments in 2024 and 2025) is often misunderstood when viewed through a global lens.

This share is largely driven by PayPal, which acts as a trusted, default checkout option for many German shoppers.

In markets like the US or UK, BNPL is typically positioned as a newer fintech-driven alternative to credit cards. In Germany, however, its most popular form - invoice payment (Rechnungskauf) - predates eCommerce itself.

Apple Pay and Google Pay are present but remain secondary in online commerce versus PayPal. Looking forward, bank-led initiatives such as Wero signal a gradual shift toward account-to-account wallet experiences in Europe.

Momentum is also coming from new scheme enablement and interoperability (EPI/EuroPA) that should expand wallet use cases from domestic payments to crossborder P2P (from 2026) and ultimately POS and eCommerce flows (targeting 2027).

Together, with broader acceptance of local rails (e.g., Girocard support in mobile wallets), wallets are projected to rise modestly to 32% share by 2028—about USD 93.6bn in value (5.7% CAGR), adding roughly USD 18.7bn in incremental volume.7

Consumers are accustomed to receiving goods first and paying later, often within 14 or 30 days.

This model is widely perceived as one of the safest ways to shop online, particularly when purchasing from unfamiliar merchants.

As a result: • BNPL is a core expectation at checkout; not a niche add-on • It is closely tied to trust and conversion, especially for higher-value purchases

Providers such as Klarna, Ratepay, and Riverty have digitized and scaled this behavior, while PayPal has embedded similar functionality into its offering.

Regulatory changes under the upcoming Consumer Credit Directive (CCD2) will introduce stricter credit checks, which may slightly reduce adoption rates. However, this is unlikely to fundamentally alter consumer preference for deferred payment models.

“In the past, many early retail stores in Germany worked through catalogues.

Consumers would order from a catalogue, receive the product, and then pay later using a reference number,” comments Anel Spahovic,

Nuvei’s Vice President of Commercial

“When online retail emerged, this offline model was simply transferred to the online world. What we now call BNPL is essentially the digital version of this traditional invoicebased method.”

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25

Wallet evolution Germany’s wallet market is led by PayPal today, with bank-led and scheme-led interoperability shaping the next phase.

Installment BNPL Provider approval / credit check

Select installment plan

Installment BNPL Cart

Goods delivered

Repay over time

Invoice issued

Pay in 14 or 30 days

Dominant wallet layer in Germany; in 2024, wallets account for 31% of eCommerce / USD 74.8bn

vs

Apple Pay / Google Pay - present but secondary versus PayPal in German eCommerce Wero (EPI) - launched in 2024 as a pan-European wallet; started with P2P

Invoice flow Invoice / Rechnungskauf Cart

Choose invoice payment

Goods delivered

Wero eCommerce rollout in Germany began in 2025

2026

EuroPA interoperability MoU signed in February 2026

2026

Cross-border P2P expected from 2026

2027

Cross-border POS/eCommerce targeted by 2027

BNPL SHARE:

22%

of eCommerce in 2024 (and also in 2025)

2028 BNPL SHARE:

BNPL VALUE:

21%

USD 52.2bn (2024) to USD 61.4bn (2028)

In Germany, deferred payment is a checkout norm, not a niche feature - especially invoice payment.

Interoperability ambition reaches about 130 million Europeans

Girocard integration into Apple Pay matters because Germany has 100m+ Girocards in issue

2028

Wallets are projected to reach 32% share and USD 93.6bn by 2028

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Account-to-account payments:Quietlygaining momentum Bank transfers, or account-toaccount (A2A) payments, are the fastest-growing segment in Germany’s eCommerce landscape.

Projected to grow from 20% to 23% of total transactions by 2028, A2A payments are benefiting from improvements in SEPA infrastructure, particularly the expansion of instant payments.

Unlike in markets where A2A is still emerging, Germany already has: • Near-universal bank account penetration • Strong consumer familiarity with direct debit and transfers • Established trust in bankbased payments Recent changes - including the discontinuation of legacy solutions like Sofort and GiroPay - have not reduced adoption, but rather consolidated volume into newer rails and wallet-based experiences.

This evolution is less about disruption and more about modernization of existing behavior.

“From a merchant perspective, A2A payments could be attractive particularly given PayPal’s costs, but Germany has a fragmented, legacy banking system, which makes implementation of broad A2A solutions harder.”

Anel Spahovic,

Nuvei’s Vice President of Commercial

Cards: High ownership, low strategic importance Germany presents a unique paradox: card ownership is widespread, yet cards play a limited role in eCommerce.

Several structural factors explain this: • Established alternatives (BNPL, A2A) already meet key use cases

CREDIT & DEBIT COMBINED TRANSACTION VALUE:

USD 58.8bn (2024, USD 67.9bn (2028) CREDIT CARD SHARE:

11% 10%

• Limited incentives due to capped interchange fees in the EU

DEBIT CARD SHARE:

• Cultural preference for avoiding credit and maintaining financial control

13%

As a result, cards are often used as a secondary or fallback option, rather than a primary payment method.

For merchants accustomed to card-led markets, this represents a significant shift. Optimizing for cards alone is unlikely to deliver strong conversion performance in Germany.

13%

Credit CAGR: 2.8% Debit CAGR: 4.4%

Cards are expected to grow modestly in absolute value, but lose or stay flat in share as wallets and bank transfers grow faster.

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What this means for merchants Germany requires a multi-method, trust-oriented checkout design.

At a minimum, merchants should expect to support: • PayPal (as a default wallet layer) • Invoice-based BNPL options • SEPA-based bank payments or A2A solutions The sequencing and presentation of these methods also matters.

German consumers are highly accustomed to seeing familiar options surfaced early in the checkout flow, and deviations from this expectation can create friction.

More broadly, checkout in Germany is one-part payment acceptance, and one-part aligning with consumers preference to manage risk and cash flow.

“BNPL, invoice payments, and bank transfers have long been embedded in Germany’s payment culture. When card payments became widespread, the market was already saturated with established alternatives.”

Anel Spahovic,

Nuvei’s Vice President of Commercial

Merchants that adapt to this model can benefit from: • Higher conversion rates • Increased trust at first purchase • Stronger repeat usage over time Those that do not may find that even strong demand fails to translate into completed transactions.

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Go-to-market & operating considerations Germany offers a predictable and demanding operating environment. Compared to faster-moving or less regulated markets, expansion here is less about navigating uncertainty and more about meeting clearly defined - and consistently enforced - standards.

For merchants, this reduces risk but raises the bar on execution.

Core compliance requirements (Germany) PRICING □ Show the full price upfront (incl. VAT where applicable) and avoid hidden fees/surcharges. □ Make shipping costs and delivery constraints visible before checkout completion. □ If using promotions, ensure terms are clear (eligibility, duration, exclusions) and pricing claims are supportable. □ Provide clear currency and any cross-border cost signals (e.g., duties/taxes where relevant).

RETURNS & REFUNDS □ Communicate the withdrawal / return window (commonly 14 days) and how to exercise it. □ Make the return process easy to find (steps, timelines, address/label method). □ State who pays return shipping and any conditions (e.g., original packaging) plainly. □ Set expectations for refund timing and method (including partial refunds and exceptions).

A rules-based, enforcement-driven environment Germany’s regulatory landscape is shaped by a combination of EUwide frameworks and strict national enforcement.

Key regulations include GDPR, the Consumer Rights Directive, and the Digital Services Act; and these are not unique to Germany.

What is distinctive is how actively they are enforced, both by regulators and by a well-established ecosystem of consumer protection groups and legal actors.

This has two practical implications: • Non-compliance is more likely to be challenged quickly and publicly • Grey areas are less tolerated than in some other European markets For example, requirements around pricing transparency, returns, and product information are not just formalities: they are actively monitored and enforced.

This creates a market where the rules are clear, but the tolerance for deviation is low.

DISCLOSURES □ Provide complete merchant identity and contact details (incl. legal entity information and customer support). □ Present product/service information clearly (features, restrictions, subscription terms, digital delivery, etc.). □ Make contract and checkout disclosures explicit before purchase (total price, recurring billing, cancellation, key terms). □ Clearly explain delivery timelines, exceptions, and how complaints/disputes are handled.

DATA & PRIVACY □ Provide a GDPR-aligned privacy notice that states what data is collected, why, and on what legal basis. □ Use cookie/consent controls appropriate for tracking/marketing and document consent where required. □ Enable data subject rights requests (access, deletion, correction) and define response timelines. □ Ensure appropriate security measures (data minimization, retention limits, vendor controls, breach response process).

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VAT handling pathways for selling into Germany (EU & imports) Choose the model that matches your merchant location and fulfilment setup.

Consumer protection as a market force Consumer protection is not only regulatory, but also culturally ingrained.

Germany’s standard 14-day return policy is widely understood and expected, and shoppers are highly aware of their rights. This reinforces behaviors seen earlier: • Preference for low-risk payment methods • High expectations around refunds and dispute resolution • Scrutiny of merchant policies before purchase Compared to markets like the UK, where convenience and speed often dominate decision-making, German consumers place relatively more emphasis on certainty and recourse.

For merchants, this means that policies around returns, refunds, and customer support are a form of conversion driver in Germany.

Taxation and VAT: Structured but manageable Germany’s tax environment is relatively complex, but highly structured.

Corporate taxation combines federal and municipal elements, resulting in an effective rate of roughly 30–33% in major cities. While this is higher than some European markets, it is predictable and well-documented.

VAT is applied at a standard rate of 19%, with reduced rates for specific categories. For cross-border eCommerce within the EU, the One-Stop Shop (OSS) framework significantly simplifies compliance by allowing merchants to report and remit VAT through a single registration.

For non-EU merchants, additional considerations apply, particularly around import VAT and customs duties. However, mechanisms such as the Import One-Stop Shop (IOSS) and merchant-of-record models can reduce administrative burden.

The key takeaway is that Germany’s tax environment is not prohibitive, there are multiple ways to sell into Germany, but it does reward structured compliance from the outset.

Where are you established and how are you fulfilling?

OSS

IOSS

One Stop Shop (intra-EU B2C)

Import One Stop Shop (low-value goods)

BEST FOR: EU-established merchants shipping from an EU country to Germany (and other EU states).

BEST FOR: Non-EU (or EU) merchants shipping imports to Germany where consignments are typically ≤ €150.

CUSTOMER CHECKOUT:

Charge German VAT rate (based on customer location)

INVOICE/RECEIPT:

CUSTOMER CHECKOUT:

Collect VAT at checkout (transparent landed price)

IOSS NUMBER USED:

VAT shown; merchant is seller of record

Provided in customs data (by merchant/partner)

REPORTING:

CUSTOMS CLEARANCE:

File one OSS return in your OSS Member State

REMITTANCE:

Pay VAT to OSS portal → distributed to Germany

OUTCOME TAG:

Single EU VAT reporting route for multi-country B2C sales

Goods move faster; VAT not collected again at delivery (where applied correctly)

Merchant of Record (MoR) outsource VAT + compliance execution

BEST FOR: Merchants who want speed-tomarket and reduced operational burden (especially cross-border/ digital-first), or complex multicountry setups.

CUSTOMER CHECKOUT:

Customer purchases from MoR (MoR is seller to consumer)

TAX HANDLING:

MoR calculates/collects VAT and manages invoicing requirements

FILING & REMITTANCE:

REPORTING:

MoR handles OSS/IOSS/local registrations as needed

OUTCOME TAG:

MoR may manage refunds/ chargebacks/consumer terms (model-dependent)

File IOSS return (monthly) via IOSS registration/intermediary Improves delivery experience + reduces “pay-on-delivery” friction

OPERATIONAL LAYER:

OUTCOME TAG:

Fewer internal tax ops tasks; trade-off is margin/fees + reduced control

“MoR can sit on top of OSS/IOSS rather than replace them.”

“Clarify responsibilities: invoicing, returns, customer support, data, disputes”

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Germany’s logistics infrastructure is among the most advanced in Europe, enabling fast and reliable delivery across the country.

However, this capability comes with equally high consumer expectations.

Delivery in Germany means: • Accuracy of delivery windows • Consistency of service • Clear communication throughout the process Unlike in some markets where faster delivery can compensate for higher costs, German consumers are less willing to pay for speed. Instead, they expect efficient standard delivery at low or no cost, with full transparency. The same is expected for returns policies.

This creates a structural challenge for merchants:

Market entry models and localization

What this means for merchants

Germany supports multiple entry approaches, but each comes with trade-offs. Many international merchants choose to:

Germany favors businesses that are operationally prepared from day one.

• Sell via marketplaces to access immediate scale • Partner with merchant-ofrecord providers to simplify tax and compliance • Establish local entities for greater control and margin optimization The right model depends on scale, risk appetite, and operational maturity. While language is less of a barrier than in some European markets - many consumers are comfortable with English localization still plays an important role in:

• Absorb or optimize shipping costs while maintaining margins

• Customer support

• Ensure delivery promises are consistently met

• Checkout and delivery communications

• Legal documentation

Compared to markets with more flexibility or lower enforcement, Germany requires: • Clear alignment with regulatory requirements • Strong operational processes across delivery and returns • Thoughtful selection of market entry model At the same time, the predictability of the environment reduces long-term risk. Once established, merchants benefit from a stable, transparent system with relatively few unexpected disruptions.

In practical terms, Germany is less about navigating uncertainty and more about meeting a high but clearly defined standard; one that, once achieved, can support sustainable growth at scale.

Partial localization may be sufficient for initial entry, but deeper localization often becomes necessary to engage on a deeper level and build deeper trust.

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Who is Germany ideal for?

Germany is not a universal fit for every expansion strategy.

While the market offers scale and stability, it disproportionately rewards businesses that align with its specific structural and behavioral characteristics, particularly around payments, pricing, and operational control.

This section outlines where Germany presents the strongest strategic fit, and where additional adaptation may be required.

Best-fit business models 01 | Cross-border-ready merchants

02 | Digital-first and low-friction delivery models

Germany’s structurally high level of cross-border eCommerce makes it particularly attractive for businesses already operating internationally.

Germany is particularly well suited to businesses that are not constrained by physical logistics.

Merchants with the following are well positioned to enter without needing a fully localized, in-country setup from day one: • Established EU logistics or distribution networks • Experience managing VAT and multi-market compliance • Localized checkout and customer journeys This is especially relevant compared to markets like Japan or the US, where domestic ecosystems tend to dominate and create higher barriers to foreign entrants.

Strong alignment exists for: • SaaS and subscription platforms • Streaming and digital media providers • Gaming and in-app purchase ecosystems These categories benefit from: • High cross-border acceptance • Minimal fulfilment complexity • Established consumer comfort with international providers As a result, market entry is less dependent on local infrastructure and more on pricing, payment alignment, and user experience.

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03 |Businesses with flexible payment strategies Companies that can support and optimize for non-card payment methods are significantly better positioned to succeed.

This includes merchants that: • Offer invoice-based or deferred payment options • Integrate wallet-led checkout experiences • Support bank-based payment flows

Verticals with strong market alignment Travel and Mobility Germany’s large and digitally mature travel market creates strong opportunities for airlines, OTAs, and mobility platforms.

High online booking penetration and cross-border travel behavior support international providers, although platform competition remains concentrated.

Online retail (with differentiation)

In contrast to card-first markets like the UK, Germany requires a broader payment mix to reach full addressable demand.

Retail offers immediate scale but requires clear positioning.

Successful entrants typically compete on:

Businesses that treat payments as a strategic lever, rather than a backend function are those that tend to see stronger conversion and faster adoption.

• Price competitiveness

Subscription and recurring revenue models Given the strength of bankbased payments and direct debit infrastructure, Germany is well suited to subscription-based businesses that can leverage recurring billing models without relying solely on cards.

Digital-first verticals continue to edge upward as Germany’s enterprise and entertainment spending shifts to recurring, platform-led models.

• Product differentiation • Operational execution (particularly delivery and returns) Generic or undifferentiated retail propositions are less likely to gain traction in a market with strong domestic incumbents and increasing pressure from low-cost international platforms.

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Businesses that may face friction

What this means for merchants

Card-dependent models

Germany tends to work best for businesses that meet a certain level of operational and strategic readiness at launch.

Merchants heavily reliant on credit card usage — particularly those built around card-linked incentives or subscription models without alternative payment options — may encounter lower conversion rates unless they adapt their checkout.

Premium-only positioning without value justification While Germany has high purchasing power, consumers remain valuedriven. Premium brands can succeed, but only where pricing is clearly justified through quality, brand trust, or unique offering.

Price transparency and comparison behavior can make market entry challenging for businesses without a strong value narrative.

Operationallylightmarketentry approaches Businesses attempting to enter Germany without: • Clear return and refund processes • Reliable delivery capabilities • Localized customer communication may struggle to build initial traction. Early customer experience has an outsized impact on long-term adoption due to strong loyalty patterns.

Key indicators include: • Ability to localize checkout, particularly payments • Defined logistics and returns strategy within Europe • Clear pricing and promotion structure • Customer support aligned with local expectations Merchants that enter the market with these elements in place are more likely to convert early demand into sustained growth.

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Conclusion Germany presents a compelling expansion opportunity, but one that operates on its own terms.

These factors create a market where demand is strong, but conversion is conditional.

It combines scale, stability, and sustained digital growth with a set of structural characteristics that require deliberate alignment from the outset.

For merchants, the implication is clear: success in Germany is less about unlocking demand and more about capturing it effectively. This requires thoughtful execution across pricing, payments, and fulfilment, not as isolated functions, but as interconnected parts of the customer experience.

Unlike faster-moving or more card-centric markets, Germany does not reward speed of entry alone. Instead, performance is shaped by how well a business fits with three defining aspects of the market: • A cross-border-oriented demand base, where international merchants are already embedded in the ecosystem • A payment landscape built on alternatives to cards, where trust and control influence checkout behavior • A consumer mindset focused on value, transparency, and reliability, rather than convenience alone

At the same time, Germany’s advantages are significant. Its size, infrastructure, and regulatory clarity provide a stable foundation for long-term growth. Once established, businesses benefit from a predictable environment and a customer base that tends to reward consistency with repeat engagement.

Germany is therefore best approached as a high-quality, medium-complexity market, one where the barriers to entry are not prohibitive, but where outcomes are closely tied to preparation.

For companies that align with its structural realities, Germany offers more than just access to Europe’s largest economy. It provides a scalable and resilient growth market, with characteristics that support both immediate impact and longterm expansion.

Nuvei’s role is to support that journey for merchants, regardless of which markets they’re expanding in or from.

Since 2003, Nuvei has helped merchants unlock new business models and accelerate revenue through a localized payments approach delivered on a global scale.

One intelligent payments infrastructure, built for scale and flexibility, so merchants can operate locally - in Germany and everywhere else.

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Methodology and approach To develop the data and analysis on each market in the PCMI eCommerce Datapack, PCMI first compiles all publicly available data from official sources, including central banks, banking authorities, company financial reports, chambers of commerce, eCommerce associations, fintech associations, local press, market reports and government statistics, as well as data from the World Bank and affiliated international organizations.

The PCMI team analyzes the data with a critical approach, identifying the holes, errors, and inconsistencies in this data to prepare it for primary research.

Then, PCMI conducts interviews with local eCommerce industry stakeholders to clarify, deepen, and streamline data collected via secondary research.

In the 2024 creation of this dataset, PCMI interviewed over 80 eCommerce executives including banks, acquirers, payment gateways, payment service providers, merchants, and consultants. Finally, PCMI conducts a rigorous analysis of the primary and secondary results, leveraging the perspective of our historical data collected since we first began building this dataset in 2015, to arrive at the final results.

The methodology takes a top-down approach, utilizing macro industry data and the perspective of industry aggregators (i.e. acquirers, PSPs) rather than a bottom-up approach, based on consumer surveys.

To the extent possible, the dataset is built using real, official numbers, such as official credit and debit card volumes, bank transfers and other official reporting of payment methods. Primary research combined with institutional knowledge are combined to make the needed estimations and assumptions to arrive at all breakdowns in the dataset.

Projections are calculated based on the opinion of industry stakeholders and accounts for factors such as inflation, GDP growth and regulation.

How do we define eCommerce?

In this data set, our eCommerce analysis covers all online purchases of goods and services, regardless of the device or payment method used.

Our analysis includes: • Purchases made by local citizens using all locally-issued payment methods • Cross-border purchases made with locally issued payment methods • B2C and B2B purchases that move through an eCommerce checkout • All product and service verticals, including travel, retail, and digital goods and services

PCMI avoids making projections based on the launch of new products or features, due to the unpredictable nature of such launches. Please note, PCMI reserves the right to revise historical data as new information becomes available.

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Retail is defined as:

Other is defined as:

SaaS is defined as:

All physical products purchased directly from the merchant or marketplace.

Additional digital goods and services including sports betting and online gambling, online education, digital downloads, mobile top-ups, and recurring purchases such as monthly bills, insurance payments, school tuition payments, home ownership association fees, parking, taxes and government licenses and fees if they are paid online over an eCommerce gateway.

The purchase of software delivery accessed via cloud services, rather than through the installation of said software on a computer or other device. Our data includes SaaS purchases made via an online website/checkout process, including subscription and recurring payment models, i.e. Microsoft Office, Slack, Hubspot, Canva, Dropbox, etc.

Travel is defined as: Travel services including airline tickets, car rentals, tour packages, hotels and AirBnB stays.

Ride hailing and delivery is defined as: Digital services that include services including ride-hailing and delivery apps.

Online gaming is defined as: Spend on online games or in-game purchases, which can be played via mobile, desktop, or a dedicated console. This does not include sports betting, online gambling or games of chance.

Online streaming is defined as: Video and music streaming, typically purchased as a subscription.

These expenses are not included if they are paid online via online banking or direct debit from a check or savings account.

Recurring payments to a credit or debit card are included, as are one-time payments over an online ACH portal such as Botón PSE in Colombia.

These may be used for both consumer and business purposes and both are captured in our data.

We do not include SaaS purchases that are not made through an official online checkout, such as invoice payments via online banking or wire transfer.

All locally issued payment methods including: • Locally issued credit and debit cards, online bank transfers, cash payment platforms such as Oxxo in Mexico or Fawry in Egypt, digital wallets such as PayPal, MercadoPago, ApplePay, cash on delivery, and other miscellaneous payment methods

Please note the following definitions: Cash Payment is defined as: A payment platform that enables a shopper to make an online order, receive a bar code or unique PIN and use that bar code or PIN to make the payment in cash at an affiliated retail location. Such platforms often allow payment using an online bank transfer. Examples include Oxxo in Mexico and PagoFácil in Argentina.

Digital wallet: PCMI defines a digital wallet as a payment method that stores any funding source on file, including a credit card, debit card, bank account, or stored balance, and uses that funding source to remit payment. eCommerce volume falls into the digital wallet category if the wallet brand is selected at checkout, even if a different funding source (such as a credit card) is ultimately selected as the funding source.

Examples include staged wallets such as PayPal, TigoMoney and MercadoPago.

Please note:

Tokenized card wallets, or passthrough wallets, such as ApplePay, are included under credit and debit card volume.

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Bank Transfers: When applicable, PCMI names the specific bank transfer scheme, such as UPI or Pix. If the bank transfer scheme is selected at checkout, this volume is classified as the bank transfer scheme, not the bank or digital wallet ultimately used to execute the payment.

BNPL: is defined as a payment button offered by a BNPL fintech that enables the shopper to finance the purchase at the time of checkout, with multiple payment methods, including credit cards, debit cards, bank transfers or cash. BNPL offerings that take place within a wallet ecosystem (such as MercadoCrédito) are not considered here.

Hybrid payment methods: Payment methods that group several of these payment methods under one brand are specified by their name, i.e. PagoEfectivo, Fawry.

Our analysis excludes: • Payments made by international visitors with internationally issued payment methods • P2P payments • Sales made over social media and paid for in cash or using an A2A payment solution • In South Africa, InstantEFT is considered within bank transfer payment methods OZOW and Stitch • Unless otherwise stated, all currency is expressed in US dollars

Country specific notes • Please note that numbers contained in figures and tables may not add due to rounding

Other technical specifications Please note, our numbers may not include sports betting or online gambling volume paid via cash voucher or other volume that falls outside the purview of card acquirers and bank transfers.