PayPal Is Used by 75% of Buy Now Pay Later Shoppers in Germany

Article by Cihan Uzunoglu | May 08, 2023

Buy Now, Pay Later (BNPL) is a popular service through which consumers get to purchase goods or services immediately and defer payment for a later date. As is the case with most services, there are many providers out there offering BNPL options to shoppers. Findings of a survey conducted by eCommerceDB and Statista provide valuable insights regarding the most popular BNPL providers among online shoppers in Germany. Let’s delve into these results and identify the most popular BNPL providers in Germany, in the light of various factors. 

As BNPL has grown in popularity over the years, competition has increased, and many players have entered the market. When it comes to BNPL provider preferences, the results show that three-quarters of BNPL shoppers* in Germany have used PayPal's BNPL service in the past 12 months, followed by Klarna with 59%. Looking at the results, we see that the gap between these two providers and the others is rather wide, as Afterpay takes the third place with 15%, followed by Affirm with 5%, Zip/QuadPay with 3%, and Sezzle with 1%. 


For the sake of having a holistic view on the topic, it is important to consider the demographics of BNPL users in relation to their provider preferences. Concerning the age distribution of users for each provider, it is clear that BNPL buyers between 25 and 44 are more likely to use PayPal's BNPL service, while users younger than 25 are more likely to use Klarna. Other providers – namely, Afterpay, Affirm, Zip/Quadpay, and Sezzle – are used evenly across all age groups. 

The gender distribution of users in this context also reveals an interesting pattern. While women are more likely to use Klarna, Afterpay or Sezzle, men are more likely to use PayPal or Affirm. In addition to this, women and men were found to be just as likely to have used Zip/QuadPay. 

Having covered age and gender, we will now have a look at how household conditions play a role in consumer preferences for different BNPL providers. These conditions, namely household income and household size, determine which providers consumers choose. In terms of annual disposable household income, we see that Klarna is relatively stronger than PayPal in the “<15.000” bracket than in the high income brackets, while others (Afterpay, Affirm, etc.) are particularly used in high-income households.


Another aspect of households that is highly influential in this context is the household size – the number of people living in a household. Regarding household size, BNPL shoppers living in 1 and 2-person households are reported to be much less likely to use BNPL, compared to other households. In addition, Afterpay and Affirm are most popular in 3-person households compared to other household sizes, while Klarna is often used in larger households of 5 or more people. PayPal, on the other hand, remains the preferred BNPL option across all household sizes. 

The last element we will look at in relation to users' preferences for different BNPL providers is city size. Digging through the survey results, we see that PayPal is the strongest in cities with 500,000 to 1,000,000 inhabitants. Another comparison reveals that Klarna is less used in very large cities with more than 1,000,000 inhabitants, while Afterpay is used a lot in those large cities with 22%, compared to cities with different numbers of inhabitants. This is potentially interesting from a marketing perspective, among others, as both providers focus on female users. Less popular BNPL providers tend to be more widely used in larger cities. While Affirm was increasingly named in cities with more than 100,000 inhabitants, Zip/QuadPay was especially used in cities with more than 500,000 inhabitants. 


To wrap things up, the data indicates that PayPal's BNPL service is the most popular among BNPL shoppers in Germany, with Klarna being the second most preferred provider. Age and gender play a significant role in provider preference, with younger users and women more likely to use Klarna or Afterpay, while men are more likely to use PayPal or Affirm. Household and city size, as well as annual disposable income, also seem to impact BNPL provider preferences. These findings can be useful for BNPL providers in understanding their customer base and adapting their services to cater to their target audience.

*: Online shoppers in Germany who have used a ‘Buy Now, Pay Later’ service in the past 12 months.