GERMANY

Source: IMF, International Financial Statistics, July 2021.

• The German central bank is the Bundesbank (www.bundesbank.de).
• The Bundesbank is a member of the European System of Central Banks (ESCB) and operates certain activities, such as issuing currency, under the authority of the European Central Bank (ECB – www.ecb.europa.eu).

Bank Supervision

• In November 2014, the ECB, via the Single Supervisory Mechanism (SSM), assumed responsibility for supervising the financial stability of banks operating within the euro zone. However, while the ECB has final supervisory authority over all banks operating within the euro zone, it will only directly supervise those banks classified as ‘significant’ under the terms of the SSM (115 significant banking groups have been recognized to date). ‘Less significant’ banks will continue to be supervised by the national supervisory authority, BAFin (Bundesanstalt für Finanzdienstleistungsaufsicht – www.bafin.de), which reports to the Federal Ministry of Finance

• 'Per mille' fees are applied on payments between resident and non-resident accounts.
• Multinational companies are often able to negotiate a fee structure.

• DISCLOSED / UNDISCLOSED 

Both are offered. In general both programmes require a minimum turnover of € 100M. 

• RECOURSE / NON-RECOURSE 

Main product is non-recourse factoring. Recourse factoring is possible, but only for companies with strong ratings. 

• STRUCTURED PRODUCTS 

Receivables purchase programme (net peak clearing method) for large and corporate clients with a good rating, due-date factoring, reverse factoring. 

• EXPORT / IMPORT 

Export factoring is managed directly to all EU countries and some OECD countries. Import Factoring is offered for Germany, Austria and the German-speaking area of Switzerland. Financing of domestic and export transactions up to € 10M and a term of up to five years per transaction is also possible (FIT-Solution). 

• CONCENTRATION REQUIREMENTS 

General concentration limits are 15% for undisclosed and 20% for disclosed factoring. Specific concentration limits on top debtors are individually to be agreed up to 100% depending also on rating. 

• MAX. PREPAYMENT % 

Funding of receivables in general up to 90-95% within the debtor credit limits. In regards to IFRS requirement and without dilution 100% is possible to the total gross claim. 

• CREDIT COVER % 

100% protection against bad debts. Existing credit insurance policies (preferably 90% coverage) can be included into the contract (co-insurance). BNP Paribas Factor then provides the remaining part in order to come to the 100% coverage. 

• OFF-BALANCE SHEET SOLUTIONS 

In general, off-balance sheet solution is standard. Based on IFRS requirements, negotiations with clients and auditors are necessary. 

• INVOICE TRANSFER 

Interfaces are automated via d-Basics. 

• ON-LINE APPLICATIONS 

Standard in all inhouse factoring solutions. 

• DELAYED DUNNING 

If applied, maximum terms 60 days after due date (90 days for selected clients). 

• DATA FACTORING 

Data factoring is standard in all inhouse factoring solutions. 

• CURRENCIES OF FINANCE 

In general: EUR, GBP, CHF, USD. (other currencies are also possible)

• Credit transfers are used by companies to pay salaries and suppliers, and to make tax and treasury payments.
• SEPA credit transfers can be settled via the EMZ, STEP2 (accessed via the EMZ), or bilaterally via correspondent banking networks.
• Approximately 1,426 banks in Germany participate in the SEPA credit transfer scheme.
• High-value and urgent domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2-BBK.
• High-value and urgent cross-border credit transfers can also be settled with end-of-day value via the Euro Banking Association's EURO1 system. Fourteen banks in Germany participate directly in EURO1.
• High-value cross-border credit transfers in domestic and other currencies can be processed via SWIFT, correspondent banking and bank branch networks.
• The Bundesbank processes cross-border payments in EUR or foreign currencies via its Customer Access Mechanism (CAM). CAM is divided into three subsystems: CAM-Individual, CAM-SEPA and CAM-IMPay (for international mass payments). CAM is affiliated to over 100 countries outside Germany.
• The European Payment Council’s SCT Inst scheme (a pan-European 24/7 instant payment scheme for SEPA credit transfers) enables the transfer of funds (the maximum threshold value is EUR 100,000) to another account in less than ten seconds.
• EBA Clearing and Italy’s SIA Group have developed and implemented a pan-European platform for instant EUR payments called RT1. It is fully compliant with the SCT Insts scheme and is in line with the ISO 20022 global messaging standards for instant payments. As of June 2021, there were 1,252 SCT Inst particopants.
• EBA Clearing has launched a pan-European request to pay (R2P) infrastructure solution with the support of 27 payment service providers from 11 countries. The new 24/7 service is compatible with the SCT and SCT Inst schemes and allows payees to take the initiative to request a specific payment from the payer.
• TIPS is a pan-European service for the settlement of instant payments in central bank money. The service enables payment service providers and ACHs with access to TARGET2 to offer fund transfers 24/7, 365 days a year. TIPS is aligned with SCT Insts. It is primarily focused on EUR payments but is technically capable of settling payments denominated in other currencies.

• Direct debits are used for regular payments, such as utility bills.
• SEPA direct debits can be settled on a same-day or next-day basis via the EMZ or STEP2.
• There are 1,414 Core SDD participants and 1,359 B2B SDD participants.

• The cheque is not a common cashless payment instrument in Germany. It is primarily used by large companies.
• Cheques are primarily used by large companies.
• Cheques with a value greater than EUR 6,000 are processed through the ISE.
• Cheques with a value of EUR 6,000 or below are processed via the BSE.
• Low-value cheques can also be processed via the German savings banks and cooperative banks' proprietary systems.

• Card payments are increasingly popular, especially for retail transactions.
• There were 115.6 million debit cards and 37.3 million credit cards in circulation at the end of 2019.
• Maestro and Visa-branded debit cards are the most widely issued.
• Visa and MasterCard-branded credit cards are the most widely issued.
• American Express and Diners Club credit cards are also available.
• Debit card payments are processed via the EMZ.
• Credit card payments are processed by the card issuing company.
• Contactless card technology is available in Germany.
• All cards issued are SEPA-compliant with EMV chips.

• There were 95,289 ATMs in Germany at the end of 2019.
• There were 1.34 million POS terminals in Germany at the end of 2019.
• All ATMs and POS terminals are EMV-compliant.

• The dominant electronic wallet scheme, GeldKarte, is often incorporated into debit cards.
• There were 74.4 million cards with a GeldKarte function in circulation at the end of 2019.
• Mobile payment schemes are available. The German public savings bank system, Sparkassen, has its own mobile payment scheme.
• E-money payments are settled via the EMZ.

• BNP Paribas' Global Trade Solutions (GTS) team in Germany has senior trade managers in each of its 9 business centres, providing local support to corporations across Germany. In addition, centralised GTS operations are located in Frankfurt with 15 senior officers. Together, this team provides a comprehensive, integrated trade finance offering to corporations headquartered in, and operating in Germany.

• The EU has trade agreements in place with over 30 countries.
• The EU is currently in free trade negotiations with a number of countries, including the Association of Southeast Asian Nations (ASEAN), Australia, Indonesia, Mercosur (the Southern Common Market), Uruguay and the USA.
• The EU-UK Trade and Cooperation Agreement came into force on 1 May 2021.

Source: IMF, International Financial Statistics, July 2021.