Bitkom study: big cities are increasingly relying on electronic payment for municipal services: market and trends

Mercedes pay, the former PayCash Europe payment service provider, will allow Daimler customers to easily pay for mobility services using their smartphones.

Be it the citizen registration office, the municipal zoo or the fine office: German cities are increasingly using electronic payment. 80% of large cities offered electronic payment methods for administrative services in 2021. This is the result of a special evaluation of the Bitkom Smart City Index.

Large German cities are increasingly expanding digital payment offers for municipal services. The percentage of large cities using electronic payment methods for administrative services rose to 80% in 2021. This is 8 percentage points higher than the previous year. This is the result of a special evaluation of the Smart City Index, the digital ranking of 81 German cities with more than 100,000 inhabitants by the digital association Bitkom.

Terms of payment

On average, 2.2 electronic payment providers are available to pay for administrative services. The most popular is Giropay (83%), followed by Visa and Mastercard (71%), PayPal (63%) and Paydirekt (52%). Without exception, all cities offer card payment at the Citizens’ Registration Office, but are limited to paying with an EC card. Credit cards are accepted in every fifth city (19%). 6% offer mobile payments via Apple Pay or Google Pay.

Tickets for local public transport can be paid for by card at ticket machines in three quarters (75%) of all major cities. 97% accept debit cards, 67% credit cards and 5% mobile payments. When it comes to paying fines, electronic payment methods still can’t get the majority.

Every third major city (33%) allows you to pay fines with Giropay, 26% accept credit cards, 15% Paydirekt and 11% PayPal.

Duisburg and Freiburg are in the lead

Achim Berg, president of Bitkom
“Digital payment solutions are not just a service to pay for administrative services quickly and easily. They also help municipal administrations and companies to process their payment transactions more efficiently and save costs, “says Bitkom president Achim Berg.

The leaders in payment services are Duisburg in North Rhine-Westphalia and Freiburg in Baden-Württemberg. Both cities offer digital payment methods in ten of the 18 areas surveyed, including the Citizen Registration Office, the zoo and online citizen services. This is followed by Dresden, Düsseldorf, Frankfurt, Kassel and Mannheim, each with nine of these services.

“Digital payment solutions are not just a service to pay for administrative services quickly and easily. They also help municipal administrations and companies to process their payment transactions more efficiently and save costs, “says Bitkom president Achim Berg. Furthermore, using multimodal mobility apps with integrated payment function, it is possible to group and centrally book local public transport, car sharing and other mobility offers. Traffic data can be used to better manage traffic flows and warn users about alternative routes and mobility solutions. There are also opportunities in the areas of education, culture and tourism.

Further information and practical examples are available in the Bitkom position paper “Digital Payments in the Smart City and Smart Region” 1.

1 https://www.bitkom.org/Bitkom/Publikationen/Digitales-Bezahlen-in-der-Smart-City-und-Smart-Region

Smart City Index: 11,000 data points for 81 cities

Bitkom Research experts recorded, verified and qualified a total of approximately 11,000 data points for the Smart City Index. All 81 cities with at least 100,000 inhabitants were analyzed and evaluated in the five thematic areas of administration, information technology and communication, energy and environment, mobility and society. The five areas are divided into 36 indicators, which in turn consist of a total of 133 parameters: from online citizen services to sharing offers for mobility and from smart garbage cans to broadband availability. Prior to publication, cities were given the opportunity to verify and integrate the data. 79% of cities made use of this option. The Smart City Index is supported by Deutsche Telekom, Microsoft and Visa.
Note on methodology: The information is based on a study conducted by Bitkom Research on behalf of the digital association Bitkom. The index values ​​are based on publicly accessible data sources. All cities had the opportunity to review and comment on the information collected. 79 percent of cities took advantage of this option. The 36 indicators are calculated from 133 parameters per city and a total of 10,773 data points. All indicators have been normalized, i.e. translated on a scale from 0 to 100. The study report with a complete and unpublished special assessment for all categories and use cases for digital cities is available at https: // www.bitkom.org/sites/main/files/2022-03/11.03.22_Studie_Smart_City_Index.pdf


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