Germany, your payment debacle

German financial institutions first ignored the opportunities in the payment sector, then slept through them, and now they are all in business, except for the local companies. That’s shameful.

The payment and banking scene is undeniably never boring. Not a month goes by without new products, banks, fintechs and payment solutions hitting the market. But who actually needs all this and do you have to find it all good?
From now on, our author Nils Wischmeyerwill be highlighting a product, topic or the “latest hot shit” in his monthly column “Nils nörgelt”. After all, there is (almost) always something to complain about.

Europe’s most valuable fintech in just a few months: that’s the story currently being told about “Checkout”, a British start-up that flew more or less under the radar for a few years, then raised many millions from investors and Tadaaaaa, today has a valuation of 15 billion US dollars (12.4 billion euros). Dear Commerzbankers, just to give you an idea: this is more than twice as much as the venerable bank with the yellow logo is currently worth on the stock market.

Particularly painful for the German payment and banking scene, however, will undoubtedly be the business model with which the start-up has socked away a valuation: with Payments. The company is just the next payment service provider making the money that the German corporations didn’t want. That’s rightfully falling on their feet now.

Germany, your payment debacle

Germany is unfortunately not a payment spectacle, but a payment debacle

Even the retrospective is painful: Deutsche Bank has sold Easycash as well as Deutsche Card Services, Concardis has long since ceased to be in German hands. The savings banks only hold minority stakes in their former payment hopeful, now called Payone, and thus have a very limited say. And I’m not even talking about all the money that has gone into supposed solutions like Paydirekt and others – and seeped away like rain in the mud.

Germany, at least from a bird’s eye view, is more of a payment debacle than a payment spectacle. Of course, there are still one or two other providers, Unzer aka Heidelpay for example, PPRO or Computop, but who of them plays in a league with the really big providers? No one, really, and there are reasons for that that can be eradicated – provided you act immediately and, for once, effectively.

The boom around payment providers could have been foreseen

Germany, your payment debacle

For one thing, thanks to the online boom, there is a gigantic market that wants to be occupied. On the other hand, the stores – the virus willing – will want to reopen, offer payments and review their current deals. Investors are a good indicator of return-generating trending topics.

Currently, virtually everyone is throwing money at the payment providers: Stripe is currently valued at 70 billion US dollars, Adyen is listed on the stock exchange at more than 60 billion euros. And don’t say now: Oops, nobody could have expected that. That would be lying in your pocket!

If the German scene wants to catch up, it must act now. And do it quickly and without making the mistakes she has made in the past. This means that a clean, customer-oriented solution is needed that is pumped into the market quickly and with a lot of sales power – and where only one and really one has the say. Shared solutions with umpteen opinions at the table are just as efficient as mobile payment solutions with a pager.

The European Payment Initiative makes old mistakes

Then, of course, the solution must work across channels (online, POS, MPOS) and the owners must not be stingy with possible subsequent investments. Once it’s up and running, it’s wait, wait, wait. Those who sell at the first opportunity for a few million euros will never conquer the billion euro market that others are currently playing in.

“Those who sell at the first opportunity for a few million euros will never capture the billion-dollar market that others are playing in.”

And please, please, please, dear big banks, after all the failures and big announcements that never came to anything: Please don’t announce the next big thing that repeats exactly the problems that already existed. We are talking about the European Payment Initiative, the new wunderkind among initiatives, the next transnational hope showered with billions. In principle, it looks like this: Banks are pumping an extremely large amount of money into a system that is supposed to be nothing less than a new standard, a stab at the solutions from the US and, of course, intended to be Europe-wide. What, did someone say paydirect? Time for checkout, ladies and gentlemen – in the best sense, of course.

Autor
Nils Wischmeyer ist Gründer des Journalistenbüros dreimaldrei und schreibt unter anderem für die Süddeutsche Zeitung, die Wirtschaftswoche und die brandeins. An der Finanzbranche findet er (fast) immer was zum Nörgeln. mehr