COVID-19 has hampered the growth in Germany’s payments industry, but it will start to benefit from the gradual lifting of lockdown measures, says GlobalData, a leading data and analytics company.

Germany has been one of the worst affected countries by the pandemic, but its lockdown is set to be relaxed to revive the economic activity once confirmed new cases slow down.

GlobalData expects cards to benefit at the expense of cash, as consumers are shifting towards the online and digital payments. Subsequently, the value of total card transactions is set to see a slight decline of 0.8% in 2020, before returning to steady growth of between 1.6%-1.8% between 2021-23.

Ravi Sharma, Banking and Payments Lead Analyst at GlobalData, comments: “Card providers will benefit from consumers moving away from cash and opting for more contactless payments methods. However, an overall decline in the consumer spending will offset this in the short-term. Consumers staying at home will use online methods to purchase essential goods such as canned food, toilet paper and groceries, which will limit any reduction in card spending.

“When shopping in stores, consumers have shifted from cash payments to digital ones, particularly contactless cards and mobile wallets. To encourage the shift away from cash, contactless limits were raised to EUR50 (US$45.20) in Germany. This growing preference is expected to drive growth in mobile payments.”