Germany's Mittelstand is the backbone of the economy — innovative, adaptable, and high-performing. Honestly, as a Dutchman, I never thought I'd be the one saying that so emphatically. But this Mittelstand can only reach its full potential if the conditions are right. And that's precisely where Germany is falling short.

Digitalization with the Handbrake On

Germany faces massive challenges when it comes to digitalization — that's hardly a secret anymore. Government offices are still working with paper files and fax machines; schools have slide projectors instead of digital whiteboards. Add to that a sluggish broadband rollout, mobile network gaps, and a serious shortage of IT talent.

The problem isn't a lack of political will — it's a lack of pace and follow-through. Billions are flowing into defense and traditional infrastructure, but the real question is: are we investing enough in the infrastructure of tomorrow? In the technologies that will secure our competitiveness for the long haul? I have my doubts.

Germany Is Lagging Behind on Digital Payments

I've spent nearly 20 years in the payments world — and digital payments are a textbook example of just how much ground we've lost.

Germany is a leading industrial nation, but when it comes to digital payments, it's playing in the minor leagues. In countries like Sweden, the Netherlands, or Denmark, 70 to 90 percent of all payments have long been handled digitally. In Germany, the figure is only around 42 percent.

Many retailers only accept card payments above a certain amount — and some don't accept them at all. During Euro 2024, friends from elsewhere in Europe sent me photos of long queues at German ATMs. They could hardly believe how commonplace cash still is here. It might raise a smile, but this isn't a matter of tradition — it's a matter of neglect.

Because consumers here want the same freedom of choice they have anywhere else. They want to decide whether to pay with cash, card, smartphone, or smartwatch — just as they decide whether to communicate by letter or email. A modern country should make that possible.

Digital Payments as a Key Technology

Some dismiss this as a side issue. But anyone who thinks that way is underestimating just how much digital payments matter. They're not a "nice to have" — they're part of essential economic infrastructure. Without them, many of tomorrow's business models simply don't work. Whether it's charging electric vehicles, public transit, e-commerce, or artificial intelligence — all of it depends on secure, interoperable, standardized payment processes.

We're already seeing scenarios emerge in which AI systems handle transactions on their own — cars that refuel and pay for themselves, machines that automatically order spare parts, or virtual assistants that book services.

If we sleep through this transition, others will shape it for us. American giants like Visa, Mastercard, PayPal, Apple, and Google already dominate the market. If Europe wants to preserve its digital sovereignty, it needs to set its own standards in payments too — standards that are open, fair, and friendly to innovation.

Digitalization Begins at the Checkout

Whether in schools, public administration, or everyday life — digitalization only becomes tangible when people can actually experience it. How we pay is therefore more than a question of convenience; it's a mirror of our digital maturity.

Germany has everything it needs to lead in the digital age: brilliant minds, strong companies, plenty of ideas. Digitalization isn't a side project — it's economic policy in its purest form. Germany has started down the path — but it's high time to pick up the pace.