Online payment methods
German banks pull the plug on Paydirekt/Giropay
The lack of acceptance of the online payment method Giropay/Paydirekt could now mean its end. Photo
© Jens Kalaene/dpa
With high expectations, banks and savings banks launched a joint online payment method in 2015. It never became a competitor to Paypal. Now Paydirekt/Giropay is threatened with extinction.
The joint online payment method of German banks and savings banks, which was launched almost nine years ago as a competitor to PayPal, is facing closure due to a lack of acceptance. The shutdown of Giropay/Paydirekt at the end of the current year could be decided as early as this Wednesday at a shareholders’ meeting, according to informed sources. Several media outlets had previously reported on this.
High expectations for the start of 2015
The German banking industry launched Paydirekt in autumn 2015, more than three and a half years after initial preparatory work, in order to offer a domestic payment service to counter the US giant Paypal and the credit card companies Visa and Mastercard in the booming online trade. Consumers should be given the opportunity to pay for purchases on the internet quickly and easily by connecting to their checking account. The German banking industry advertised that payment data in this case would remain with the main bank and on servers in Germany.
In spring 2021, the German banking industry merged its online payment methods Paydirekt, Giropay and Kwitt under the Giropay brand. However, the response from consumers and retailers alike remained muted, even though it was only announced in April of this year that the petrol station operator Esso had been acquired as another retailer where payments can be made using Giropay via a smartphone app. Meanwhile, Paypal has expanded its market position in Germany over the years and currently claims to have 35 million active customer accounts in this country.
Working on a European payment method
The willingness to invest further money in Paydirekt/Giropay was reportedly low in view of the poor track record. In addition, the payment system EPI (European Payments Initiative) is currently being pushed forward at the European level – also with German support. This makes it seem “as if the local credit industry had given up its German solution in favor of the future European solution,” writes the industry newsletter “Finanz-Szene”. “It is true that many market participants doubt whether it would have made sense to maintain Paydirekt alongside EPI. It is also true, however, that Paydirekt, founded in 2015, never really established itself on the market, even independently of EPI.”