eCommerce: Buy Now, Pay Later

Buy Now, Pay Later in Germany: Top Providers & Demographic Factors

Buy Now, Pay Later is growing in popularity as it offers shoppers payment flexibility. Which providers do German users prefer and what factors play a role?

Article by Cihan Uzunoglu | April 02, 2024

Online Payment

Buy Now, Pay Later in Germany: Key Insights

  • Market Leaders: PayPal and Klarna significantly lead the BNPL market in Germany, outperforming other competitors.

  • Age & Gender Preferences: The 25-44 age group and men prefer PayPal, whereas Klarna is favored by those under 25 and women.

  • Income & Household Size: Klarna is more appealing to those with lower incomes and larger households, whereas PayPal is popular across all household sizes.

  • City Size Impact: In mid-sized cities, PayPal leads, while Afterpay is preferred in larger cities; other BNPL services are more popular in big cities.

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 ECDB and Statista provide valuable insights regarding the most popular BNPL providers among online shoppers in Germany.

Top Providers: PayPal Leads

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 75% of BNPL shoppers in Germany have used PayPal's BNPL service in the past 12 months, followed by Klarna with 59%.

Top Providers BNPL Shoppers in Germany Use, 2023

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%.

Klarna Favored by Women
and Users Under 25

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.

Luxury Market Girl Shopping

Afterpay Preferred by High-Income
and 3-Person Households

In addition to aspects we covered so far, household income and household size also 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.

Top Providers BNPL Shoppers in Germany Use by Household Income, 2023

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.

Less Popular Providers Are More Popular in Larger Cities

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.

Top Providers BNPL Shoppers in Germany Use by City Size, 2023

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.

Buy Now, Pay Later in Germany:
Closing Thoughts

The forecasted 14% growth in BNPL transactions in Germany for this year reflects the rising importance of flexible payment options among consumers. This growth not only highlights Germany's key role in the European BNPL scene but also emphasizes the impact of services like Klarna, which has been a game-changer since its introduction.

The ongoing challenge for BNPL providers will be to adapt to changing consumer preferences, ensuring they remain relevant in a competitive landscape where choice and convenience are paramount.