Paydirekt, the German rival to Paypal, aims to increase its user base seven-fold by the end of 2017, increasing to 7 million registered users from its current one million, according to internal documents seen by Handelsblatt.
The online payment service has had an underwhelming first year of existence. Established as a cooperative venture by most German banks in late 2015, the online payment service has been slow to develop a user base, and continues to be dwarfed by Paypal, its better-known competitor.
So far, the German service has attracted only 730 online retailers, few of them well known. According to Handelsblatt’s sources, less than 100,000 payments were made with the service in 2016.
Paypal currently has almost 19 million active users in Germany, and can be used to pay more than 50,000 online retailers. The U.S. company does not issue country-specific transfer data, but to judge by international trends, there could potentially have been as many as 500 million German Paypal transactions last year.
Paydirekt’s owners say the service needs time to grow, hoping smartphone functionality may provide a much-needed boost.
Although low on users, Paydirekt enjoys considerable institutional support. It was established in 2015 by a number of German banks, including Deutsche Bank and Commerzbank, as well as the country’s network of cooperative banks. It has since been joined by Germany’s network of savings banks, providing a substantial potential user base.
Paydirekt’s owners say the service needs time to grow, hoping that adding smartphone functionality may provide a needed boost. They point to the Polish online payment service Blik, established two years ago, which now has 3.5 million users and 2 million transactions per month.
Paydirekt would not comment on the reported plans, saying it did not respond to speculation.
The German Savings Bank Association (DSGV) told Handelsblatt that all participating institutions would “continue to intensively support registration of customers and retailers. We are convinced that we will make great strides in this by the end of the year.”
Elisabeth Atzler is a banking reporter for Handelsblatt in Frankfurt. To contact the author: firstname.lastname@example.org