Digital payments – an integral part of a good customer experience

According to a recent study conducted by Growth from Knowledge (GfK) on behalf of Mastercard, 89% of Germans now expect card payments to be possible in every retail store. 57% of Germans prefer digital payment by card, smartphone or smartwatch.

This contrasts with the fact that one in eight stores in Germany still does not accept card payments (study by the EHI Retail Institute from 2023). These companies should be particularly concerned by the fact that 39% of Germans have already left a store or not even entered it because only cash was accepted. This means they are losing customers and sales. Surprises also await, for example, in countless parking garages where outdated, error-prone and high-maintenance machines only accept coins and bills – usually only after several attempts.

The frequently cited argument that card payments cause high costs for retailers is countered by a study by the Deutsche Bundesbank, according to which the total costs for cash handling in retail amount to an average of around 24 cents per transaction. In addition, many customers now seem to be willing to pay a few cents more if it means they no longer have to go to the ATM or even carry a wallet when paying with a smartphone.

In other European countries and many third world countries, it has been possible to pay digitally at any good flea market for years, whether with a mobile card terminal or simply from smartphone to smartphone with a QR code. This is still a long way off in Germany. In addition, card acceptance in Germany could suffer another setback, as many card terminals still only accept the Girocard, while German banks are now increasingly only issuing Mastercard and Visa debit cards. These have also been standard in many countries around the world for years, while Germany still relies on the isolated Girocard solution. This is hardly suitable for online purchases and is increasingly useless in other European and non-European countries. At the same time, many tourists in Germany are excluded from card payments because they have Mastercard or Visa as standard.

Retailers should be aware that digital payment options are now an integral part of a good customer experience. This is not just an empty buzzword, but a prerequisite for surviving in today’s market. Thanks to the internet, customers today are more informed, have more options for comparison, a greater choice and are therefore much more demanding. As the aforementioned study shows, the acceptance of digital payment methods is increasingly becoming a decision criterion from the consumer’s point of view. If a customer makes a purchase in another store because of this, the retailer not only misses out on the one-off revenue – because the customer will not return any time soon.

According to a study by Forrester Research from 2021, improving customer loyalty by just 5 percent can lead to a 12 percent higher return on sales. Given these figures, every retailer can calculate how much revenue they are missing out on if digital payment is a decision criterion for even a certain percentage of their potential customers. The bottom line is that they can only win with this payment option – card fees or not.

Since the pandemic at the latest, German consumers have also discovered digital payment for themselves. It remains exciting to see when barrier-free digital payment will be possible across the board in Germany for both locals and tourists.