The high expectations as a competitor to Paypal were never fulfilled. Now the German banks and savings banks are pulling the plug. A new European payment method is already in the starting blocks.
The end of the joint online payment method Giropay/Paydirekt of the German banks and savings banks is getting closer. “At their shareholders’ meeting on June 12, 2024, the shareholders of Paydirekt GmbH decided to discontinue the Giropay payment method at the end of this year, subject to the approval of their respective committees,” a Paydirekt spokeswoman said. “Final committee decisions on this are still pending.”
The joint offering, launched in autumn 2015 as a competitor to Paypal under the Paydirekt brand, never met expectations in terms of reach – neither among consumers nor among retailers. This did not change when the German banking industry joined forces in spring 2021 and merged the online payment methods Paydirekt, Giropay and Kwitt under the Giropay brand.
The willingness to invest further money in Paydirekt/Giropay was reportedly low in view of the poor track record – especially since the EPI payment system is currently being promoted at European level with German support. The European Payments Initiative (EPI) is supported by the German Savings Banks Association (DSGV) as well as Deutsche Bank and DZ Bank, among others. The shareholders of Paydirekt GmbH are Commerzbank and Deutsche Bank, DZ Bank for the cooperative financial group and GIZS GmbH & Co. KG for the savings bank financial group.
US giant Paypal far ahead
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 April 2024, it was announced 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.
Source: Stern
