Germany’s Paypal

Better Late Than Never

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Buying online content? In Germany, users often do so via Paypal.
  • Why it matters

    Why it matters

    Germany’s online payment system Paydirekt could become a rival to PayPal and credit card companies MasterCard, Visa and American Express.

  • Facts

    Facts

    • The market launch of Paydirekt is scheduled for November 8, following a test phase over the summer.
    • Paydirekt is being organized by the German banking industry, but cooperative banks are the only ones who have started promoting the system to their customers.
    • Experts warn that German banks need to hurry up and hook as many online retailers up to the system as possible before the Christmas business starts.
  • Audio

    Audio

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PayPal, the U.S. online payments system, has been a thorn in the side of Germany’s banks for over a decade.

Bankers such as Theodor Weimer, the head of Bavaria’s Hypo-Vereinsbank, or HVB, have been struggling to come up with a German answer to it. Now, finally, he’s going to get his chance.

On August 17, HVB will begin testing “Paydirekt,” a payments system designed by the German banking sector, using online furniture retailer D-Living as a testing partner, according to a presentation made at a top-level meeting of banks last week that Handelsblatt has seen.

Paydirekt GmbH, the company that developed the system, and HVB declined to comment. D-Living said in a statement: “We think this payments system will give customers a new and good alternative to existing forms of payment.”

To say that German banks have been latecomers in the surging online payments market would be putting it mildly. PayPal has 16 million customers in Germany, and it’s among the most popular payments systems in the booming Internet retail market.

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