Germany's Mittelstand is the backbone of oureconomy — innovative, adaptable, and respected around the world. Honestly, as aDutchman, I never thought I'd be the one saying that so emphatically. But onone crucial front, we're losing ground: digitalization. And nowhere is that gapmore visible than in payments. Because how we pay is more than a question ofconvenience — it's a mirror of our digital maturity.

Digitalization with the Handbrake On

It's been clear for years that Germany islagging behind on digitalization. Many government offices still rely on paperfiles and fax machines, schools use slide projectors, fiber-optic coverage isscarce in rural areas, and even mobile network dead zones are still part ofdaily life. On top of that, a shortage of IT professionals is slowingmodernization even further.

What's missing isn't awareness — it'sresolve and pace. The federal government is investing billions in defense,traditional infrastructure, and climate protection. All of that matters. Butthe real question is: are enough resources also flowing into the infrastructureof tomorrow — the digital systems, networks, and technologies that will secureour prosperity for the long haul? I have my doubts.

Digital Payments as a Benchmark

Payments are a telling example of just howfar behind we are. Germany is a leading industrial nation — but when it comesto digital payments, we're playing in the minor leagues. In the Netherlands,Sweden, and Finland, more than 70 percent of all transactions are handleddigitally; in Denmark, the figure is around 90 percent. In Germany, it's just42 percent.

That may sound trivial, but digital paymentsystems aren't a matter of convenience — they're part of the criticalinfrastructure. They create transparency and efficiency, enable new businessmodels, and form the foundation for future technologies — from automatedbilling at EV charging stations to AI systems that execute transactions ontheir own.

As long as we remain stuck halfway there, werisk seeing innovation happen somewhere other than Germany — and being forcedto import it, often from American tech giants. Anyone serious about digitalsovereignty has to put the groundwork in place so that domestic companies canstay competitive.

Choice and Fairness in Payments

Today's consumers expect to decide forthemselves how they pay — cash, card, smartphone, or smartwatch. Yet manyretailers still only accept digital payments above a minimum amount, or don'taccept them at all. That isn't tradition — it's structural backwardness. Nearly40 percent of customers abandon a purchase when no digital payment option isavailable. That's a loss no one benefits from.

A legal requirement to accept digitalpayment methods, as is currently being debated, would therefore be a sensiblestep. It wouldn't just give consumers a real choice — it would also promote taxfairness. Every digital payment leaves a traceable record and makes tax evasionharder, which costs the state billions every year. In cash-heavy sectors likethe restaurant industry in particular, it would help level the playing field.

Digitalization as an Opportunity forthe Mittelstand

The Mittelstand is often accused of beingtoo hesitant when it comes to digitalization. My experience says the opposite:the will is there, and so is the willingness. What's missing are resources,time, and simple, scalable solutions. Large corporations have in-house ITdepartments and multimillion-euro budgets — small and mid-sized companiesdon't. If digitalization is going to succeed, it needs two things: clear policyguardrails from government, and practical, workable solutions on the ground.

Digitalization shouldn't be seen as a burden— it should be seen as an opportunity, a tool for safeguarding competitiveness,transparency, and innovation. Government and business have to work together onthis: the state needs to create a reliable framework, and businesses need touse it with courage.

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