Could Super Apps Change Germany’s Money Economy?


It has often been observed that German consumers are an anomaly among their northern European neighbors due to their relatively high species preference.

For example, a 2020 European Central Bank (ECB) report found that physical euros accounted for 51% of point-of-sale transaction value, compared to just 22% in the Netherlands and 24% in Luxembourg.

These results were corroborated by a recent PYMNTS study, “Benchmarking the World’s Digital Transformation”, which found that Germans’ preference for cash was higher than in any of the other eleven countries studied, cash or checks. being used in 37.9% of all reported transactions. .

Read the report: Global Digital Transformation Benchmarking

But this report also found that Germans were heavy users of digital wallets, which were used in 20% of in-store transactions. Additionally, Germany is the only country among the 11 markets analyzed where PayPal has become the preferred digital wallet for in-store payments, accounting for 14.7% of all in-store digital wallet payments.

German consumers are also hungry for great apps, another PYMNTS report recently revealed.

Published in conjunction with PayPal, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy” report found that consumers in Australia, Germany, the UK and the US are generally open to the idea of ​​an app that combines payments with a wider range of virtual products and services.

Read more: The Super App Shift: How Consumers Want to Buy and Spend

The study also found that 20% of German consumers surveyed said they were “very” or “extremely” interested in a great app. Extrapolated to the entire population, this represents 14 million Germans with annual expenditure estimated at 612 billion dollars.

Considering the two reports together, it looks like Germany represents a huge potential market for PayPal to pursue its super app ambitions. In fact, according to the Super App Shift report, 16% of Germans rank PayPal as their most trusted super app provider, just after banks.

Germany lays the groundwork for PayPal Super App

In discussions of super apps, China’s WeChat and Grab in Southeast Asia are often described as archetypes of the modern super app, operating largely as standalone systems.

The former started as a messaging app and grew into a full-service social media channel with integrated shopping and payment features, while the latter started as a taxi booking app before expanding its offerings. food delivery services and digital payment solution GrabPay.

See also: UK consumers trust PayPal more than banks to provide a great app, research finds

Where Germany and the United States differ from Southeast Asian markets is that social media, ride-sharing and food delivery are already highly competitive markets with top players building loyalty. a certain degree the clientele.

But as a payment solution, PayPal already has a large share of both markets, especially in e-commerce. And in the German market, the stage is set for PayPal to achieve super app status not by adding new services, but by further streamlining existing integrations.

For example, according to data from Statista, the three leading digital carpooling and ridesharing services BlaBlaCar, ADAC Carpool Club and Uber, which together account for almost 90% of the German market, all integrate PayPal as a payment method.

It’s a similar image for food delivery in Germany. Despite a wide playing field where international heavyweights and local services currently exist side by side to cater to different niches, what they almost all have in common is PayPal integration as a payment option.

It’s all about convenience

As noted in the Super App Shift report, “One of the key benefits of a super app is its elegance: such a solution takes what was once a jumble of tangled apps, websites, and channels and bundles it into a single centralized experience.”

In many ways, PayPal already provides a slick experience for German users, but rather than the PayPal app functioning as a separate hub to access various services, it’s a payment web in which consumers are tapped, connecting a certain number of different apps and providing users with simplified one-click payments.

In an increasingly digital world, the types of purchases for which e-wallet payments offer more convenience than cash will only grow, and PayPal is well positioned to replace cash transactions as digital payments are gaining ground.

The Super App Shift found that globally, more than 90% of convenience-driven consumers would integrate a super app into any area of ​​their lives. With this statistic in mind, Germany’s monetary economy presents a huge growth opportunity for a super app.

If PayPal becomes Germany’s favorite super app, its rise will be a mirror image of how WeChat and Grab have emerged as integrated multi-functional mobile apps in their respective regions – albeit with a twist. While Asian super apps started with services and added payments later, PayPal started with payments and is increasingly integrating other services into its solution.

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NEW PYMNTS SURVEY FINDS 3 IN 4 CONSUMERS HAVING HIGH DEMAND FOR SUPER APPS

About: Results from PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, UK and USA. and showed strong demand for one super multi-functional app rather than using dozens of individual apps.

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