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Monday June 21, 05:50
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ePayments To Gain Traction At Germany’s Banks
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Electronic payment systems “are becoming more attractive for large financial institutions”, states a new paper from Deutsche Bank Research, particularly as card-based payment mechanisms move online. Innovative payment solutions are still needed for global eCommerce to realize its potential, while security issues such as authorization, authentication and data integrity remain salient topics. Established payment systems such as credit and debit cards have an edge over newer e-payment mechanisms, but both help banks to retrench in the payments value chain, as perceived security is crucial to consumer adoption.
Credit cards are a popular payment option for global eCommerce, but the Stiftung Warentest consumer testing agency indicates that, taking commissions and chargeback fees into account, online credit card use in Germany is only profitable for amounts of EUR 1.50 upwards. Smart cards combined with a debit card, such as Germany’s GeldKarte, offer a better proposition for online payments of less than EUR 10, states Deutsche Bank researcher, Stefan Heng. GeldKarte readers typically cost EUR 60, but as reader prices fall and Internet reloading facilities become available, Heng expects GeldKarte usage to increase.
“Banks, with their good reputation for conducting monetary transactions, have a duty to help lay the foundations for a successful launch” of innovative e-payment systems, Heng asserts in the paper. Fewer than three of the existing 100-plus business models are unlikely to survive within five years, Heng says, even if the outlook for online credit, debit, mobile payment and smart card use in Germany is improving under new security initiatives. To this end, Heng expects the major banks to begin taking more interest in e-payments and to win over online customers through strategic investment in e-business initiatives.
(Deutsche Bank Research)
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