Payment trends and developments in cashless payments: our key conclusions from the EHI Payment Kongress 2023

The EHI Payment Kongress is not just one of the essential meeting places for the EFT industry in the DACH region. It is also an important trend barometer, as attendees gain exciting insights into the latest payment developments. In this article we have summarised for you what we see as the most significant developments and findings from 2023.

treibauf at the EHI Payment Kongress 2023

For treibauf the EHI Payment Kongress 2023 was once again a genuine highlight: This year too, we not only had our own stand at the event: in a joint talk with Dr Marcel Stadelmann from ZHAW (Zurich University of Applied Sciences), treibauf CEO Dr Dominique Bächler also enriched the thrilling Kongress programme by presenting the results of the «Retailer survey on cashless payments in Switzerland».

The other talks on the key payment developments and trends in Germany were just as thrilling. Accordingly, we first want to outline for you what we see as the most important conclusions from these presentations.

Development of sales in physical stores in Germany

Compared to the previous year, sales in physical stores have nominally risen slightly (+1.1%). However, this increase has to be viewed in the context of factors like inflation and non-stop opening hours (in contrast to during the Covid pandemic) and has to be adjusted for these factors. In real terms, sales in physical stores have dropped by 4%, while online sales have continued to grow (+4%).

The development of card payments in sales

In 2022 the share of card payments at the POS also continued to rise in Germany from 58.8% (2021) to 59.7% (2022). The share is still lower than in the Scandinavian countries or Switzerland. Nonetheless, the trend for electronic payments is also unbroken in Germany.

If we look at girocard, a popular payment method in Germany, sales have risen by 12.3 billion euros since 2021. In direct contrast to other cashless payment methods, however, its share of sales has actually dropped slightly (from 42.4% to 41.9%).

Trend 1:
International debit cards are coming

One of the reasons why market leader girocard has seen its share drop slightly in comparison to the other cards is the introduction of the new international debit cards.

Many banks are gradually replacing their girocards, Maestro or V PAY cards with the new Mastercard and Visa debit cards.

The growth in these new cards has not only meant that girocard is being used less in the context of cashless payments. The share of EFT/POS credit card payments has also fallen in the last year (from 9.0% in 2021 to 8.2% in 2022).

The retail companies have mixed feelings when it comes to the introduction of debit cards: because even though international debit cards have some advantages for consumers: the fees that companies incur per transaction with these new cards can be 2.5 to 3 times as high! Additionally, older POS terminal models may not be able to process the international debit cards.

And by the way: to ensure you always keep track of the sales shares for the different payment types and the fees they incur, we recommend the electronic payment reconciliation & analytics software Matchbox.

Trend 2:
Cashback is on the rise

One clear trend is that consumers are increasingly taking advantage of the cashback function at the POS. This means that they can also withdraw money with their card directly at the till as part of the payment process.

The cashback rate has more than quadrupled over the last three years, partly because there are fewer and fewer bank branches and cash machines in Germany: 284 billion euros (12.26% of all cash sales) was paid out to customers in 2022, which is 12.2% more than 2021!

Although the retail companies are helping the banks with this service, they have to pay additional fees for each cashback transaction. Retail companies paid 13.7 million euros in cashback fees alone in 2022.

Incidentally, 75% of Kongress attendees assume that the cashback function will be used even more in future – and so the fees paid by retail for this service will also rise.

And by the way: our Pepper solutions already support cashback functionality – making it easier for retail companies to offer customers this service.

Trend 3:
PayPal is becoming ever more popular in e commerce

Looking at payment providers in online retail, PayPal is continuing to extend its lead: believe it or not, 94.7% of all online retailers offered PayPal as a payment option in 2022. And at 29.6% of total sales, PayPal is the most important payment method ahead of purchases on account.

It is particularly interesting that the share of purchases on account has fallen by 6.6% since 2020, while PayPal’s share has risen by 4.7% over the same period. At the same time, however, other multichannel payment solutions like giropay, Apple Pay or Google Pay are also continuing to increase in the context of e-commerce.

Trend 4:
Social media and livestream payments

Completely new channels are also being used for direct transactions in the e-commerce arena. In the context of social media, payment functions can be integrated directly into livestream formats: “diverting” to a shop is thus becoming obsolete – and consumers can buy the product presented in the livestream with a tap or a click.

So another new channel? If you can already hear the groans of your colleagues in accounting, you should test Matchbox. The reconciliation software automatically reconciles all EFT payments with the corresponding amounts paid into your bank accounts.