The German banking industry is exploring options to merge bank-controlled online payment services providers paydirekt GmbH and giropay GmbH, Handelsblatt reported May 18, citing sources.

Combining the two companies will help German banks strengthen their digital payments offering against PayPal Holdings Inc., according to the report. The COVID-19 pandemic has given a boost to digital payments in Germany with e-commerce revenues jumping 18% year over year to €6.8 billion, Handelsblatt said.

German public and private sector banks have been mulling a new digital payments initiative for about a year, and have looked for ways to combine the offerings of Paydirekt, Giropay and mobile payments application Kwitt under one brand, the newspaper said.