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Germany country report The German market – large, complicated and slow moving An interview with Christine Krause, associate at advisory firm Innovalue Which acquirers are strong in grammes (linked to payment payment initiatives or will they Germany? cards) in the German market? collaborate with established There are three groups of Even though Germans are payment players? players: pure acquir- still reserved in card use, loy- Most of the players are coop- ers like ConCardis (owned by the alty schemes are increasingly erating with financial institutions major German ) or Elavon, accepted and well established. and plan to issue own digital pure network serv- Nevertheless usage of loyalty payment cards in their mobile ice providers (NSPs) like Telecash cards in Germany is below aver- wallets. In addition they invite all (owned by ) and those, age compared to other coun- banks to enable their cards to be who are active in both segments tries in Western Europe, offering used in those wallets. Until now like B+S (part of the Savings a further growth potential. wallets with NFC technology banks group), easycash (owned The three main players in this have not been launched yet, but by ingenico) or InterCard. Some segment in Germany are Payback, we expect to see some motion NSPs like easycash or InterCard Miles and More (Lufthansa) and in the second half of the year. provide payment guarantees for bahn.bonus (Deutsche Bahn). Christine Kr a u s e the schemes called Miles and More and bahn.bonus out receiving additional value. How do Germans pay on the ELV and act like debit acquirers. in particular, recorded growth Germany is currently falling internet? over recent years, while Payback behind other European coun- According to a study of the Who are the most important has seen a slight stagnation. tries regarding Mobile Payments EHI institute the major- card issuing banks in Germany? It remains to be seen wheth- acceptance - intuitive and simple ity of Germans pay with By the total number of cards, er Payback will gain valuable solutions with low entry barriers transfer. Credit card, PayPal and the clear number one are the impetus from its parent com- are needed. direct debit follow with over 10% Savings banks. The group includes pany , as they respectively. on delivery, three large issuers of cobranded focus on very different customer How powerful are German tel- pay in advance and sofortüber- cards: LBB, LBBW and DKB. They groups (mass market rather than ecoms in mobile payments? weisung [an epayment service] are followed by the Cooperative upscale). Are they launching their own account only for a small part. banks including DZ Bank and Payback has issued around WGZ. Large private issuing banks 37 million cards in Germany of are Deutsche Bank (including which around 20 million are DV Bank starts m-payments Postbank), and Commerzbank actively used (source: Statista). Offering for O2 wallet customers amongst many others. Another major trend is the increase in partnerships. One ortmunder Volksbank has What is the landscape in terms example is the cooperation Dstarted an NFC mobile pay- of interchange fees on payment between Payback and the Mobile ment service featuring a vir- transactions in Germany? Operator Deutsche Telekom tual credit card integrated into Interchange fees vary depend- enabling customers to collect smartphones. ing on the type of card. For credit Payback points for the purchase The German bank’s cards, the average fee is between of Deutsche Telekom products. “ClassicCard Mobile” virtual 1-1.2%. card is available to custom- ClassicCard Mobile credit card Fees for the local debit How do you see the German ers that have the digital O2 on customers’ smartphones via scheme are between mobile payments market devel- Wallet. They must also be using a secure wireless connection, 0.2% and 0.3% but there is a new oping? How important will NFC either the Samsung Galaxy S3 storing the card in a secure ele- procedure in implementation to be, or will other technologies or Samsung Galaxy Ace 2 NFC- ment on the SIM card. For pay- allow (mainly large) merchants to be used? enabled smartphone, and will ments of over E25, customers negotiate even better fees with There are new payment ini- need an O2 mobile contract and must also enter a PIN code to the banking groups and NSPs. tiatives announced in Germany related NFC SIM card. authorise the transaction. There are no banking fees for nearly every week. The Trusted Service Manager Customers submit an ELV (direct debit) but merchants But until now the market (TSM) service is operated by application for the virtual have to bear the full risk in case impact is relatively slow as Giesecke & Devrient in coop- ClassicCard Mobile credit card the NSP does not provide a pay- German consumers are rather eration with systems integrator to Dortmunder Volksbank, and ment guarantee. The fees for a sceptical about mobile pay- DG Verlag, which is a partner then receive a notification that guaranteed ELV transaction are ments. Furthermore the deploy- of cooperative banks as well as allows them to activate the pay- slightly lower than a girocard ment of NFC-capable POS other institutions. ment service. The TSM operated transaction. terminals is evolving slowly as DG Verlag uses the TSM serv- by G&D then enables the pay- retailers do not speed-up their ice to install and personalise the ment application. How important are loyalty pro- infrastructure investments with-

10 card & payments world MAY 2013