Whether with a ring, smartwatch or smartphone – fast payment at the checkout is gaining in popularity.
(Photo: Pagopace)
Dusseldorf Simply hold your finger to the EC device at the supermarket checkout and pay – your wallet or smartphone stays in your pocket. So-called payment rings make it possible. The Cologne start-up Pagopace, for example, presented such a smart ring on the television show “Die Höhle der Löwen” a good year ago. This is visually indistinguishable from a conventional piece of jewelry made of ceramics. Inside, however, there is an NFC chip that enables contactless payment – just as consumers are familiar with from smartwatches or smartphones.
Digital payment is a business field of smart payment providers. They have earned a good reputation among users of financial services. This is the result of a survey by the Cologne market research institute Servicevalue. In May and June of this year, more than 48,000 customers were asked how satisfied they are with banks and other financial service providers.
313 companies in 17 categories were considered in the study. Smart payment providers performed best overall, followed by auto banks and building societies. Servicevalue identified Paypal as the best smart payment provider.
At first glance, the popularity of the smart payment specialists among consumers is surprising, given that Germans love their cash. In a study conducted by the Deutsche Bundesbank in 2021, coins and notes were the most popular payment method in Germany. But the proportion of electronic transactions is steadily increasing.
This is not least due to the corona pandemic, in which contactless payment became more important for hygienic reasons. The increased use also reduced security concerns, says Kevin Hackl, Head of Digital Banking and Financial Services at the digital association Bitkom. “People have learned how safe and easy digital payment works – and that their account is not emptied.” In addition, digital cards and payment gadgets are “fundamentally more secure than physical cards,” explains Hackl.
Mobile payments with smartphones in particular are gaining in popularity. According to a GfK study in 2022, every fourth German has tried it at least once within a year. 45 percent of 18- to 29-year-olds even pay regularly using their mobile devices.
According to Kevin Hackl, three criteria are particularly important for customers when it comes to smart payment providers: simplicity, security and the widest possible range of usability. “Only if a payment service is also available from a large number of retailers is it also attractive for many customers.”
Papal can be used particularly widely in online trading. The former eBay subsidiary owes its first place in the ‧Servicevalue ranking to the fact that it was the most popular among twelve service providers that had to be assessed in the category. 15.5 percent of those surveyed named Paypal the best smart payment provider.
The US group is the market leader in Germany when it comes to payments in e-commerce. According to an estimate by the EHI Retail Institute, almost a third of online purchases in terms of sales were paid via PayPal – before purchases on account and direct debits. In order to get people to pay more often with PayPal, the group has come up with a number of ideas.
“Last year we introduced the PayPal Checkout, which retailers can use to integrate the payment method into their online shop,” says Jörg Kablitz, Managing Director for PayPal in Germany, Austria and Switzerland. In addition, Paypal has introduced a kind of mini loan with the “payment after 30 days” on the German-speaking market. This offers an alternative “to the traditional purchase on account, which is very popular with Germans,” says Kablitz.
Nevertheless, PayPal lost active customers for the first time this year. The number of customers as a metric has meanwhile become secondary for the company, explains Managing Director Kablitz. “Since the beginning of 2022, we have been concentrating on promoting the active and regular use of our products.” Paypal measures this in transactions per customer account. “We currently see an average of 53.1 transactions per year,” says Jörg Kablitz. A year ago there were 47.
Consumers are not only showing more commitment when it comes to digital payments. They are also more active in investing in the stock market. The Deutsches Aktieninstitut just reported a new high for share savings. According to the study, almost every fifth person over the age of 14 owned shares, share funds or share-based ETFs last year. According to the institute, 600,000 people under the age of 30 invested in the stock market for the first time in 2022. Apparently, course corrections from Dax, Dow Jones and Co. were used to get started.
But classic saving is also worthwhile again after the European Central Bank (ECB) ended its negative interest rate course last year. “Now there is an incentive to think about investing and to have a consultation,” says Claus Dethloff, managing partner of Servicevalue.
“Consumers have regained a little more leeway to invest their money.” But who has the trust of investors? Among the fund companies, Deka Investments achieved the best value in the financial service provider ranking. For 12.6 percent of those surveyed, the savings bank’s securities house is currently the best of eleven service providers in this category.
Deka Investments has over seven million customers, most of whom are private investors. They invested their money in equity funds and real estate funds last year. “Equity funds make up about two thirds of the existing savings plans,” says Ulrich Neugebauer, spokesman for the management. The financial products of the savings bank subsidiary had performed better than the year before, despite inflation and the mood for crisis.
“One of the decisive factors was that on the stock side, we recognized the industry trends towards information technology and cyclical consumption at an early stage,” Neugebauer explains the investment strategy. “In the summer of 2021, for example, we relaunched an equity fund with a focus on artificial intelligence so that our customers can participate in the major topic of the future.”
Deka Investments also relies on new technologies in other areas. For example, the traditional fixed-interest savings bank letter was switched to faster blockchain technology a few weeks ago.
Even if digitization is expanded, Deka Investments, as a savings bank subsidiary, will continue to have branches where customers can get personal advice. This is currently an important competitive factor, says market researcher Claus Dethloff from Servicevalue. “Especially after Corona, people are increasingly looking for personal contact in banking transactions again.” Accordingly, the service providers would have to position themselves very well across all communication platforms and channels.
The customers of the custodian bank Lynx are above average satisfied with the offer and advice. In the financial service provider ranking, it was recognized as the best of a total of 15 providers evaluated – for 8.1 percent of those surveyed, the company was number one in the service value survey. Lynx is internationally active, but looks after its customers in German-speaking countries exclusively from the German branch.
“So our customers don’t end up in a foreign call center, but can talk to certified exchange traders in Berlin,” says Christoph Schöneberg, head of the German branch. Lynx continues to attach great importance to being easily reachable by phone – not just by chat or e-mail. Customers would “appreciate this, particularly in the case of complex issues,” explains Schöneberg.
Lynx customers can trade internationally via an online platform. The most popular is the USA as the largest financial market in the world. “But small caps on European stock exchanges are also playing an increasingly important role,” says Christoph Schöneberg. He also notes a development that initially sounds paradoxical in times of inflation and financial uncertainty.
“Our customers are also discovering more and more derivatives for themselves,” he says. The financial instruments allow speculation on price movements and are generally considered to be risky. But it’s not just about speculation, says Schöneberg. “By using options, for example, a portfolio can be very well protected against market fluctuations.”
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