The degradation of grass—dominated ecosystems and grassland abandonment have become widely spread phenomena across the world. Payments for environmental services (PES) are seen as an innovative approach to stop these trends by making payments to land users in return for adopting practices that secure ecosystem conservation and restoration. Designing efficient PES requires that possible challenges are effectively managed, such as the lack in linearity and immediacy of environmental effects, unexpected monitoring and enforcement costs and possible socio—economic objectives (adequate compensation, equity). The aim of this article is to compare government—financed PES for grassland ecosystem services in two contrasting regions (Xilingol League, China and Brandenburg, Germany) in order to facilitate knowledge exchange on PES design and implementation and the transfer of best practices. Our particular interest is in how different PES mechanisms work, which actors are involved and what characterizes success and failure cases. The comparison shows that both PES programs are not very effective in providing environmental services due to lack of participation of affected farmers (both regions), insufficient monitoring and control (Xilingol) and inappropriate management prescriptions (Brandenburg), which should be improved in future programs.