Most Online Stores in Germany Offer PayPal as Payment Option

E-wallet payments are now as common as credit cards, popular for their easy integration with bank accounts and security methods that ensure funds remain accessible only to authorized users. PayPal is the number one e-wallet provider in the world. It is beating out several competitors that have similar concepts but are less globally adopted.

How common is PayPal compared to more traditional payment methods? In global eCommerce, credit cards lead the way in terms of adoption by online stores. There is one exception.

Germany Has the Highest PayPal Adoption in eCommerce

Germany has the highest percentage of online stores offering PayPal as a payment method, with 92.4%. This rate even exceeds that of VISA and Mastercard, which are at 80.9% and 80.7% respectively. Germany is also the only market where PayPal is the number one payment method in eCommerce.

In other markets where PayPal has one of the highest adoption rates, credit card providers outperform the fintech service in eCommerce. This is the case in the United States, France, the United Kingdom, Spain and Australia.

PayPal is offered by 82.7% of online stores in Australia, 82.0% of online stores in Spain, 80.0% in the UK, 77.4% in France and 76.5% in the U.S. The latter is unexpected, given that PayPal has originated in the U.S. What factors influence PayPal’s online adoption?

A Web of Causes for Varying Adoption Rates

Payment provider adoption is embedded in a market landscape that is shaped by consumer habits and the broader payments landscape. For example, the United States has a wide variety of payment providers, many of which are e-wallets.

Although all of them are less used than PayPal (Google Wallet has a 20.3% adoption rate and Apple Pay 18.9%), the pool of many smaller providers means that PayPal's overall penetration is lower. In Germany, the e-wallet provider landscape is less diverse and more traditional payment methods outside digital payments or credit cards, such as bank transfers, are common.

PayPal sees its best adoption rates in European markets, with the top non-European markets being Australia and the U.S. The consistent adoption across Europe is based on a network effect: Cross-border eCommerce (for which Europe is a leading region) works best when payment methods overlap and wide distribution of the same provider enables online payments across countries.

For countries like Germany, where payment methods outside of credit cards are common, e-wallets lead to a wider inclusion of consumers. It is reasonable to assume that e-wallet significance will grow in the years to come.