Mobile payment offensive: How PayPal is gaining ground in brick-and-mortar retail

With installment purchases, discounts and Will Ferrell against cash – PayPal unleashes its biggest campaign in German retail.

While Apple Pay and Google Pay are considered established players in contactless payment, PayPal has long focused on online retail. This is now changing. With a large-scale advertising campaign, the US company is bringing its mobile payment service to brick-and-mortar retailers, accompanied by a clear challenge to cash.

The plan: PayPal users should be able to pay directly at the checkout via app, quickly, contactlessly and with a Mastercard connection. More than one million people in Germany have already registered. At the same time, the provider is rolling out installment purchasing for brick-and-mortar purchases. A function that was previously associated more with e-commerce.

To support this strategy, PayPal attracts customers with discount campaigns at well-known retailers such as Obi, Deichmann, Peek & Cloppenburg (Düsseldorf) and XXXLutz. During the so-called Deal Week, PayPal customers receive a discount of up to 7% on Thursdays, up to a maximum of 60 euros per day. The campaign runs until late fall, a clear lever for acquiring new customers and increasing footfall in the retail sector.

It's not so much the discount that causes a stir as the way to get there: posters with slogans such as "You love cash. But has cash ever loved you back?" were deliberately placed without the PayPal logo. Only later did it become clear who was behind the provocative campaign. A communicative strategy that polarizes: For some a clever breach of taboo, for others a borderline case of manipulative brand management.

From July 2025, new terms of use for PayPal accounts will also come into force, both for customers and retailers. Details have not yet been communicated, but industry insiders suspect extended data usage and new fee models. In addition, with every brick-and-mortar payment transaction, PayPal not only gains market share, but also valuable purchasing data that can be used for personalized advertising, recommendation algorithms or even third-party marketing planning.

For retailers, the integration of PayPal in the brick-and-mortar environment offers concrete advantages: The app appeals to mobile, digitally savvy target groups in particular and can therefore increase the conversion rate at the point of sale. The installment purchase option also creates additional sales potentia – especially for higher-priced products.

At the same time, the growing role of digital payment services is placing new demands on the industry: topics such as data responsibility, customer loyalty and control over the shopping experience are coming more into focus. Transparent communication and clear strategic partnerships help to maintain the balance between innovative payment technology and entrepreneurial autonomy.

PayPal is going all out with its current campaign. Emotionally charged, technologically broad-based and communicatively provocative. However, success depends less on the marketing budget than on social acceptance. The central question is not whether cashless payment is technically possible, but whether it is culturally desirable.

“Why pay with cash when cash doesn’t pay you back? We are determined to show Germany there’s a better way to pay in-store – with the safety and ease of our contactless wallet, with the flexibility of installments, and by helping put money back in your pocket with Deal Week,” says Joerg Kablitz, Managing Director of Germany, Austria & Switzerland, at PayPal.

For retailers, the PayPal offensive is more than just a marketing stunt. It is a harbinger of a retail ecosystem in which payment, advertising and customer loyalty are ever more closely linked.