Around 33 million credit cards are in circulation in Germany. Most of them come from Mastercard and Visa. These two credit card providers together have a market share of more than 80%. This is due to a peculiarity of the German credit card market: banks have an unusually high say.
The German market: only 3 relevant market participants
The largest credit card provider in Germany is Mastercard. According to the Cream bank, every second card in circulation in the Federal Republic bears the logo of this provider. 2nd place goes to Visa. The associated market share has fluctuated between 30% and 35% in the past ten years, but has recently increased.
Otherwise, only a third market participant is important in Germany: American Express. This provider had a relatively constant market share of 5% in recent years. The remaining 10% to 15% are spread over several small providers such as Diners Club.
The German credit card market is unusual
The dominant position of Visa and Mastercard makes the German credit card market unusual. The world’s largest credit card provider is actually American Express: the company generated worldwide sales of $ 33.47 billion in 2017. Visa only got $ 18.36 billion. Mastercard reached $ 12.5 billion.
For comparison: Even the online payment provider PayPal was stronger at $ 13.09 billion. American Express therefore has more sales worldwide than Visa and Mastercard combined.
The German credit card market is also unusual because there are relatively few cards in circulation. In 2017, 98% of Germans had a debit card, but just over 36% had a credit card. And those who have a card rarely use it within the Federal Republic. Little has changed in recent years: According to the Cream bank, 1.4% of all payments in Germany were made by credit card in 2008 – in 2017 it was just 1.5%. The credit card is primarily purchased in this country in order to be able to pay abroad. Even as a means of payment on the Internet, it is rather marginal.
According to the Cream bank study, the reason for the Germans’ skepticism is a general distrust of the means of payment. Respondents expressed concerns about privacy, security against financial loss and a transparent overview of expenses. In none of the six ratings asked by the Cream bank did the credit card receive a better rating than the EC card or cash.
Why do Visa and Mastercard dominate the market?
Visa and Mastercard have best adjusted to the German market. This means two things: First, the providers do not issue the cards in the Federal Republic themselves, but leave this to the banks. In this way, the financial institutions can create tailor-made offers for customers and, for example, include special insurance in their credit cards. For example, some banks waive the annual fee.
This is generally an advantage for customers: Although there are actually only two credit card providers in Germany, you can find countless cards with very different strengths.
Second, Visa and Mastercard invest heavily in technical innovations to secure payment transactions with the cards. Processes such as “Visa 3D-Secure” are relatively well known and create trust.
This has an effect, as the Cream bank study also shows: Those who regularly use a credit card and make payments with it rate it on average significantly more positively than people who do not know this form of payment themselves. Put simply, anyone who chooses a credit card generally doesn’t regret it.
American Express’ unique selling point
An American Express credit card is considered a status symbol. It has a reputation for paying particularly large amounts. This image also applies to Germany, which is why the market share of this provider remains constant at a relatively low level.
Credit card providers compared
There is a multitude of different credit card providers on the market with their different offers and packages. Here we would like to provide you with an overview and further information about the companies and their respective services so that you can find your way through the jungle of the various issuers and find the credit card that suits you.