instant messages #13 by Marcus W. Mosen
Marcus W. Mosen comments on payment or banking topics on various portals and delights his followers on twitter (@mwmosen) with pointed contributions on payment, fintech or politics. From now on you will find his monthly guest column “instant messages by…” on the latest happenings in payment, banking & co.
Highlights have become very rare in the German payment industry. Why? Well, there is hardly a payment services provider or supplier left that still operates its corporate headquarters in or its strategic sovereignty from Germany and could thus make it into the headlines on its own merits. Reflexively, the objection must now come: no, there are still German players such as Unzer (ex Heidelpay), VR-Payment (ex CardProcess), Payone (ex B+S Card Services), Computop (always Computop since the 90s). But let’s be honest: with the exception of VR-Payment and Computop, the strategic sovereignty of all the other companies mentioned lies in decision-making structures outside Germany.
But is it enough for the claim “German payment champion” to only have its headquarters in Germany? I had already dealt with the requirements for a payment champion a few years ago, among others at Payment & Banking. Even then it was true that ambition must transcend national borders. And today the minimum goal for a champion is at least “Europe”, better still “international”. Anyone who wants to achieve this today with purely on-board resources has probably missed out on the dynamics of the payment market in recent years.
When Deutsche Bank announced its 180-degree turn towards a new approach in the “merchant business” in a press conference a few days ago, my own experiences in the German payment scene of the last 20 years immediately flashed through my mind: buying, selling, merging, constant struggle for realignment. A lot of politics and even more strategy considerations that ended up going unused. Countless background discussions in the ever-popular “Airportclub”, in retrospect often rather to be booked under “free lunch”. Many stakeholders preferred to move with the flow and only a few against it. Payment in the merchant business was not really in the focus of strategists and investment managers of German banks and savings banks.
For years, the great potential in cashless payment transactions in Europe’s largest economy has been recognized mainly by other, non-German companies and financial investors. While the love of cash was cultivated here, the growth potential in “cashless payment” was recognized there.
How could this insanely large opportunity have remained hidden from the many payment transaction experts, specialist departments and boardrooms in the German banking industry?
And now Deutsche Bank wants to return to this small-scale business – an extremely remarkable decision. It was this bank, of all banks, which had great difficulty with this business model, which can be compared to the collection of many small transactions – so-called peanuts – at many points in its development (remember the sales of Easycash, Deutsche Card Service, POS Transact and other investments).
Gone, as of now, are the days when “banking” is a business model only in the context of “investment”. And it’s certainly no coincidence that this change of heart comes at a time when central banks, governments, the ECB and even the EU Commission have recognised that digital payments play a central role in our everyday lives, or are often the customer’s essential banking experience.
And no sooner has Deutsche Bank announced its plans to the public in a background discussion than the bar for these ambitions is set correspondingly high by the press: “Deutsche Bank challenges the big payment providers” is the headline of the magazine for the digital future “t3n”. And the Dutch company “Adyen” serves as a benchmark – a company that many payment traffic experts were not really familiar with six years ago, but today is traded on the stock market at about 2.5 times the value of Deutsche Bank.
Now one thing is true: the ambitions should be really big if you don’t want to light a flash in the pan in this business to maintain your own share price. And therefore, the immediate challenges in implementing these plans are likely to be within their own towers rather than the competition. After all, anyone who ventures into the payments business now needs not only staying power but also the willingness to invest the profits from large transactions (investment banking) in the business with small transactions (payments). Because relying on Mastercard’s sponsorship alone will not be enough given the market environment.
For the self-image of the payment community, the step taken by the “DB.com colleagues” is initially a welcome ray of hope. Whether this step leads straight into the European Champions League or just to the “hidden champion” of the DACH region will be followed with interest by the payment nerd community.
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- instant messages #10 – Corona – the key event of the payment industry
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- instant messages #12 – Corona and digitalization – what remains of our old habits…