The France Under-21 international is understood to be among a shortlist of names under consideration at Selhurst Park, rather than a settled target. Toulouse defender Charlie Cresswell had also been under Crystal Palace's watch, but the 23-year-old now looks set for a move to Ligue 1 side Rennes instead, narrowing the field.
Matsima, 24, is tied to Augsburg until 2030 after joining the Bundesliga club permanently from Monaco in January 2025, following an initial loan spell. Prized for his strength, size and pace, he was a key part of Augsburg's back line last term before a tendon tear sidelined him for four months.
He also has a connection to Palace's forward line, having won a spot in Thierry Henry's France squad for the Olympic Games final in Paris in 2024 - a tournament that also featured current Eagles striker Jean-Philippe Mateta.
The interest comes as Palace continue searching for defensive reinforcements, with the futures of both Maxence Lacroix and Adam Wharton under scrutiny this summer. Chelsea have registered interest in Lacroix, though they are yet to table a bid, with Palace standing firm on their valuation given the France international still has three years left on his contract.
So far, Palace's only confirmed summer arrival is versatile defender Oscar Mingueza, who joined on a free transfer last week and signed a four-year deal to become new manager Pierre Sage's first signing at the club. Suggestions that Palace have offered Mateta a fresh four-year contract are understood to be wide of the mark.
With pre-season underway, Sage is expected to move quickly if he wants to add further defensive depth before the transfer window narrows. Palace's approach to Matsima appears to be an early expression of interest rather than an advanced pursuit, with the club continuing to assess the market before committing to a specific replacement should Lacroix depart.