Overwhelming solitude is unbearable
In a move to streamline the payment landscape and provide a more seamless experience for customers, Volksbank has announced its integration of the European payment solution, Wero, into its mobile apps. This decision aims to preserve customer ties while addressing the growing complexity and confusion caused by the proliferation of payment methods.
Traditional German banks, such as Deutsche Bank and Sparkasse, have been developing their own mobile payment solutions or partnering with platforms like Apple Pay and Google Pay in response to the rapid digital transformation, increasing consumer demand for digital payments, and competition from fintech and big tech companies. However, this fragmentation has resulted in a complex and confusing landscape for consumers.
The fragmentation is driven by several key factors. Banks are striving to adapt to digitalization and retain customers, with some offering proprietary mobile payment apps, while others rely on third-party providers or create specific P2P or merchant services. The competition and innovation pressure come from neo-banks, fintechs, and even big retailers offering their own payment solutions. Regulatory and technological evolution, such as PSD2 and open banking regulation, also require banks to invest in new API-based payment services and multiple solution rollouts, contributing to the multiplicity of payment methods.
The European solution Wero, issued by the European Payments Initiative (EPI), is being promoted to Volksbank customers as a potential solution to this complexity. Volksbank customers may soon have the option to put their Girocard in the Volksbank wallet for POS payments or pay with Wero. Wero offers P2P payments and currently boasts over 40 million customers in the Benelux countries and Germany.
This integration offers several benefits for Volksbank and its customers. By adopting Wero, Volksbank can save on interchange fees when customers pay with Wero, making transactions more cost-effective. Online payments with Wero are expected to be possible this year, with POS payments expected to follow next year. Over half a million Volksbank customers have already activated Wero and are sending money from account to account.
Moreover, the Volksbanken have committed to EPI to enable cross-border, simple payments, which would be possible with Wero. This commitment reflects a step towards standardizing the payment landscape and simplifying the user experience for customers.
In summary, the integration of Wero into Volksbank apps is a strategic response to the complex and confusing payment environment caused by the proliferation of options. This move aims to provide a more seamless experience for customers while staying competitive in the rapidly evolving digital landscape.
[1] Digital Transformation in German Banking [2] The Fragmented German Payments Market [3] The Impact of PSD2 and Open Banking on German Banks
- In an effort to navigate the complex and fragmented landscape of digital payments, traditional German banks, such as Deutsche Bank and Volksbank, are turning to fintech solutions like Wero to provide a more streamlined experience for customers, and stay competitive amidst the rapid digital transformation and competition from fintech and big tech companies.
- As part of the European Payments Initiative (EPI), Volksbank is rolling out the implementation of Wero, a solution aimed at simplifying the proliferation of payment methods by offering a standardized and cost-effective platform for POS and online payments, in response to the digital transformation in the finance business, driven by technology.
