Payment apps on smartphones will play a greater role in the future. The European Payment Initiative is also working on a so-called wallet solution for payment services.
(Photo: imago images/Shotshop)
Bonn A decision on the slimmed-down model of the European Payment Initiative (EPI) is expected to be made later this month. That’s what the head of the EPI interim company, Martina Weimert, said at the “EHI Payment” conference. “Now we are in the decision phase.” The remaining 13 shareholders would now have to declare whether they wanted to continue. “In May these crucial meetings take place.”
The further planning for “EPI 2.0” envisages that offers will gradually be released from the third quarter of next year. That will take two quarters, said Weimert. Then you will see how the feedback from the market is.
According to Weimert, the aim is to build a so-called wallet – on a smartphone this would be a special app – through which consumers can use various payment options. These included mobile-to-mobile payments, payments for online shopping and at the checkout.
Payment by QR code should play a role at the checkout. For mobile-to-mobile payments and e-commerce, EPI will be based on real-time payments.
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Originally, EPI wanted to achieve much more: establish a new payment system including an extra payment card that was supposed to replace the cards in the respective countries. In Germany it would have been about the Girocard, better known by its old name “EC card”. Now the existing cards should be able to be stored in the EPI wallet.
DZ Bank, Commerzbank and HVB have left EPI
More than half of the originally 30 or so EPI banks left at the end of February. From Germany, the Sparkassen-Finanzgruppe and Deutsche Bank are now also involved. The cooperative DZ Bank as well as Commerzbank and Hypo-Vereinsbank withdrew.
The goal of creating its own payment system was to become more independent of powerful US corporations such as Mastercard, Visa and Paypal. In some countries, national card payments are made via Mastercard and Visa, and their systems also enable cross-border payments in Europe. The online payment service PayPal is currently growing significantly in Germany.
Until then, costs of 1.5 billion euros were planned for EPI over several years. Weimert did not say how expensive the new EPI approach would be. The decisive factor now is whether retailers will accept EPI 2.0 and integrate it into their existing offerings.
Joachim Schmalzl, board member at the German Savings Banks and Giro Association, emphasized that he also very much supports the new EPI approach. However, the implementation will be more complicated than in the original model.
PayPal is now just as popular as purchasing on account
The banks are late with their plans, above all they lack their own powerful online payment service. In Germany PayPal is becoming more and more important. According to a survey by the EHI Retail Institute, a retail research institute, Paypal and the traditionally popular purchase on account in e-commerce are now tied at just over 28 percent.
>> Read here: After Maestro-Aus: How Savings Banks and Volksbanks want to ensure foreign payments with Girocards
PayPal’s number of customers has also grown rapidly in Germany. The US group had around 32 million active accounts at the end of 2021, an increase of ten percent compared to the previous year. Since the end of 2015, PayPal has almost doubled the number of customers. About 29 million of the customers are consumers, the rest are traders.
The third most popular option is paying by direct debit with a share of 17 percent – thanks largely to the online retailer Amazon. According to EHI payment expert Horst Rüter, Amazon generates a fifth of e-commerce sales and relies primarily on direct debit and credit card payments. Without Amazon, the direct debit share would have been less than three percent. For the study, the EHI surveyed almost 120 online retailers with a total turnover of 45 billion euros.
The EHI puts the share of credit card payments at a good eleven percent. In other countries, credit cards play a much larger role in online shopping.
Installment purchases were only two percent in 2021. That’s not much given the fact that later payment in e-commerce, in technical jargon “buy now, pay later” (BNPL), is considered a major growth area in the industry.
More: More online shopping: Paypal has 32 million customers in Germany