A move toward innovation in the mobile payment sector


Now’s the time for payment via smartphones to become a reality. Startups are already busy developing new solutions, but it will take more than a few to tango. In the end, it will depend on whether the right partners can team up.

Ebay is getting in on the trend via subsidiary Paypal, and Google has been pressing ahead for some time now with the Google-Wallet. The shooting star of the mobile payment market at the moment is Square, a startup from Twitter co-founder Jack Dorsey. Once again it seems like the US is emerging as the frontrunner – this time in the development of mobile payment systems.

Bernd-Josef Kohl (Head of International Business Consultants) focuses on innovations in the mobile payment ecosystem.
Bernd-Josef Kohl (Head of International Business Consultants) focuses on innovations in the mobile payment ecosystem.
Germany may not be the number one port of call when it comes to new mobile applications in payment transactions, but even here some gears appear to be in motion. “We have noticed that many startups from the digital industry are getting involved in a variety of fields with new ideas and innovations in the mobile payment ecosystem,” reports Bernd-Josef Kohl, expert for mobile payment at GFT.

German startups like Sumup or Payleven from Berlin or SMEs like IT-Werke from the city of Lahr in Baden have already become active players on the market. IT-Werke, for example, enables customers at beer gardens and supermarkets to pay via their smartphones. It’s as simple as registering online, downloading an app, scanning a QR code and confirming the amount using a PIN.

Sumup is taking Square’s approach. The Berlin-based team is turning to small business enterprises that have not been able to accept card payments due to costs. This is changing thanks to the plug-in module for smartphones and tablets. Here, the debit or credit card data is read as with any conventional reading device, and payments are signed by hand on screen.

A mobile business ecosystem.jpg

These kinds of alternative payment options are moving smaller companies into the user purview. But considering the variety on offer, it doesn’t look like we will be seeing a dominant solution on the market at this point. “A crucial shift took place with the entrance of internet companies and startups,” says Kohl. “New market players are much more willing to cooperate.”

Until now, unwillingness to cooperate among the potential market heavyweights had prolonged the path to developing a standard in the area of mobile payments. “If the right partners from banking, telecommunications and retail had come together years earlier, we would have already seen a market leader emerge,” believes Kohl. But now, newcomers from the internet startup scene are entering the picture. And they are daring to dream up new and interesting ideas.

To find out more on this topic (German article only).