PayPal cooperates with Google Pay in Germany

PayPal customers in Germany can pay with Google Pay in the future. That sounds a bit cumbersome and yet it amounts to a revolution.

PayPal cooperates with Google Pay in Germany.

“Time to dance”: With this happy message, the American payment service PayPal announces that its German customers can now pay with Google Pay. That sounds a bit bulky, but it is like a revolution: Anyone who has an Android phone and a PayPal account can use it to pay with their mobile phone in the store from now on – provided the retailer accepts contactless payments.

80 to 90 percent of the phones sold in this country are Android phones, PayPal has around 21 million customers in Germany. This gives mobile payment a huge increase in coverage and there is real momentum in the payment market in Germany. This is necessary for both Google and PayPal, because the competition is tough: The savings banks as well as the Volks- and Raiffeisenbanken are already starting with their own solutions, Apple Pay is to be launched in the course of the year.

In this country, Google announced in June that Google Pay would start in Germany. Commerzbank and its online subsidiary Comdirect as well as the smartphone bank N26 and Wirecard were also involved – but nothing came after that for a long time. More cooperation partners were therefore definitely welcome. Paypal, on the other hand, has been trying for a long time to get into stationary retail. An attempt together with Vodafone failed recently.

Ideal conditions

This means that the conditions are almost never good for a breakthrough in mobile payment. All payment terminals in Europe should support this solution by 2020. In Germany alone, around 550,000 of the 820,000 POS terminals are already able to process contactless transactions. The number of merchants who accept contactless payments has increased by 73 percent within a year, according to Mastercard. Around three quarters of the 100 million giro cards will be equipped with the NFC chip, which enables contactless payment, in the next two years. Most credit cards have already been converted.

Even if contactless payment is very popular – every second person finds it practical or very practical – it is still a niche phenomenon. Around 15 percent of all card transactions in this country are carried out contactless – a threefold increase compared to 2017. But very few of them are still carried out with the mobile phone.

For the banks, however, the activities of Google Pay and Paypal could become a problem. If the new service is used across the board, the banks are left out. You still need an account, but the banks are now missing out on valuable customer data. This could become a boomerang for the apps of the savings banks as well as the Volks- and Raiffeisenbanken. Your only advantage – that you can integrate the Girocard – is therefore obsolete. Google Pay was previously only available for credit cards, but every account can then be stored in PayPal.