The Cashless Payment Trends 2024: Our key conclusions from the EHI Payment Kongress

Smaller shopping baskets, but more transactions

Despite the effects of inflation, the average purchase amount has fallen by €1.17 compared to 2022.

Revenue share of card payments rose again in 2023

Paying by card is becoming ever more popular: compared to the previous year, the revenue share of card payments rose again from 59.7% to 61.8%. Sales with card payments accounted for 299.6 billion euros in 2023 and thus 21.7 billion euros more than 2022. Cash payments decreased again by exactly 2 % compared to the previous year.

Card-based payments are predicted to rise to a share of 66.0% by 2026 – while cash payments are expected to drop to 31.4% in Germany.

Contactless payments still increasing

In terms of payment technologies, the popularity of contactless payment via NFC continues to rise. While the share of contactless payments was still 79% in 2022, it rose by another 5% to 84% in 2023 (smartphone & card payments combined). All major companies on the EHI panel are now able to process contactless payments.

International debit brands achieving the strongest growth

A comparison of the different types of cashless payments at the POS reveals that international debit cards from Visa and Mastercard are enjoying the strongest growth: while their share of overall revenue in 2022 was just 2.9 %, this had grown by 1.2 % to 4.1 % by the end of 2023. The respective revenue shares of classic credit cards (+ 0.4 %) and girocard (+ 0.5 %) likewise achieved some growth.

With a revenue share of 42.4 %, girocard remains the undisputed leader when it comes to cashless payments at the POS in Germany.

By 2026, credit cards are predicted to rise to 9.5% of total sales and international debit cards to 6%. Growth will be weaker for girocard due to the increase in international debit cards. Nevertheless, girocard is expected to increase to a share of 43.9% of total sales by 2026.

And by the way: German retail representatives take a rather critical view of the increase in payments by credit card or international debit card, as such payments incur far higher fees.

Gift cards very common in retail

It appears as though gift cards have almost become an obligation for larger companies: almost 90% of larger companies have their own gift card system; this figure is still 49.5% for smaller companies.

And by the way: Pepper – our universal interface between the cash register and POS terminal – also supports gift card purchases 🙂

if you want to learn more about the correct posting and taxation of gift cards, this article includes more details about this payment method with special customer loyalty potential.

Cashback being used more and more

Given that there are fewer and fewer bank branches and cash machines in Germany, it is not surprising that more and more customers are using the cashback function at the POS: this means they can withdraw cash with their card directly at the cash register as part of the payment process.

The cashback rate has increased almost fivefold since 2019: while just 2.8 % of cash turnover was paid out as cashback in 2019, this figure increased to 13.31 % in 2023! A total of about 12.31 billion euros was paid out to customers at the POS in 2023.

Companies pay fees of 0.14 % on average for each cashback transaction. These fees amounted to a total of 17.23 million euros (!) in 2023.

Most of the surveyed retail companies questioned why they have to pay for a service that is effectively less work for the banks. Nonetheless, almost all retail companies (!) now offer their customers this popular service.

Incidentally, our Pepper solutions support cashback functionality – making it easier for retail companies to offer their own customers this popular service.

Instant payments are coming

On 7 February 2024, the European Parliament ruled that payment providers must enable their customers to make payments in real time (so-called instant payments) around the clock in future.

The TARGET2 payment system was used to create the necessary technological conditions for banks to facilitate transactions within 10 seconds. Due to the new Regulation of the European Parliament, the banks must now facilitate these real-time transfers throughout the eurozone – and are no longer allowed to charge more than for conventional SEPA or SWIFT transactions. At the moment, instant payments are still really expensive in most cases, however. They could certainly become a realistic payment alternative at the POS if this changes, though. It is not yet entirely clear what this will actually look like.

The difference between a card payment and an instant payment is an important process step: when someone pays by card, the payment is authorised immediately on the POS terminal. The retailer gets a payment authorisation immediately; the actual payments are received later.

This distinction does not exist with an instant payment: the transfer is completed in full. In the context of physical retail stores, however, the information about the receipt of payment also has to be sent to the cash register system. At supermarket cash registers at least, this transmission can still take a little too long. Moreover, it is not currently possible to cancel amounts or partial amounts with an instant payment.

The new instant payments also bring new challenges in terms of compliance: with real-time transfers payment providers namely still have an obligation to ensure that transactions are never being misused for the purpose of fraud or money laundering.

So it will be interesting to see how real-time transfers develop at the POS.

And what do retailers want?

The EHI study asks retailers of different sizes about payments. The needs of the retail companies themselves are, of course, also important.

In e-commerce, for example, 86% of the surveyed retail companies would like lower costs for payment processing. 64% of those asked would like greater flexibility when it comes to integrating new payment types. In the context of physical retail stores, our universal interface Pepper ensures that companies can integrate card terminals (and thus new payment types) more quickly and more flexibly.

In addition to concerns about higher fees, which are incurred for international debit cards in contrast to girocard , more than 34% of those asked said that they are not able to differentiate the international debit cards from Mastercard and Visa from the credit card payments. A further 41% are only able to make the distinction using invoice statements. There is a lack of transparency here regarding the fees that have to be paid.

This is where Matchbox from treibauf can help: the Payment Analytics Center of the reconciliation software gives users a clear overview of all the payment methods and cards that have been used – including a proper differentiation between credit card payments and payments using international debit cards.

The podcasts to listen to

If you want to learn more about the EHI study and the trends and developments from the perspective of various players, the EHI Podcast Special (German only) is definitely worth checking out.

Want to talk about trends, challenges and solutions?

We should definitely talk sometime if you want to learn more about payment trends and developments – or about how we can deliver greater flexibility, transparency and independence in your company.

Sources and link list

• Figures – data – facts – the payment study for German physical retail stores
• https://www.ehi-lab.org/podcast/special/
• https://www.ecb.europa.eu/ecb-and-you/explainers/tell-me/html/target2.en.html
• https://www.ecb.europa.eu/paym/integration/retail/instant_payments/html/index.en.html
• https://klardenker.kpmg.de/financialservices-hub/instant-payments-so-setzen-banken-die-neuen-pflichten-richtig-um/