MEETING THE NEEDS OF A BILLION DIGITAL NOMADS – AND WHY BUNQ ’S ON THEIR TRAIL
SPRECHEN SIE DACH?
NEXI TALKS PAYMENTS PARTNERSHIPS IN GERMANY, AUSTRIA AND SWITZERLAND
PUTTING THE FIS IN FINTECH HOW THE TECH GIANT IS SHAPING AN INDUSTRY’S FUTURE
SHOW STOPPER! WHY MONEY20/20 EUROPE KEEPS US COMING BACK FOR MORE
Rajesh Saxena CEO at Intellect Design Arena
MONEY20/20 EUROPE
4 The conference that listens Money20/20 Europe’s Head of Content, Gina Clarke, explains how the premier event stays evergreen by constantly refreshing that feedback loop
COVER FEATURE
6 The core question
With 329 microservices, 1,757 APIs and 535 events, Intellect Design Arena’s eMACH.ai open finance platform is transforming the way banks operate. Intellect’s Global Consumer Banking unit (iGCB) has worked with leading banks across the globe for the last 30 years. Rajesh Saxena, CEO of iGCB, describes the five key trends he sees driving technology change at the very heart of banks – and how they can devise the best strategy to embrace it
FINTECH FOCUS
10 Reaching for the stars
Technology giant FIS took a bold approach to delivering innovation for customers four years ago, which is simultaneously helping populate the fintech universe with successful startups
12 A cashless society: Where did it all go wrong?
The Payment Choice Alliance is pushing all the major political parties in the UK election race to make manifesto commitments to compel businesses to accept cash – since there’s clearly no shortage of people wanting to use it. Chair of the Alliance, Ron Delnevo, says the UK is not the only country to rethink the wisdom of going cash-free
15 Moving with the times
One billion digital nomads are predicted to be roaming the world by 2035. Dutch mobile bank bunq aims to go with them, says Chief of Staff Bianca Zwart
18 Everything but the elephant
The meteoric rise of the digital nomad as a customer segment has exposed gaps in insurance and banking provision that imaginative startups have started to fill. Natalie Marchant explores the world of the remote worker, the risks and benefits
22 The key to e-com security
There’s a lot more that can be done to improve consumer confidence in online transactions and reduce merchant losses in the DACH region, says G+D’s Stephan Hackenberg. The answer is less not more complexity
24 The language of partnership
The German-speaking DACH region is a key focus for the Nexi Group. But it can’t realise its ambitions alone, as Nexi’s Martin Pitcock and Ratepay’s Charlotte Paauwe explain
28 A never-ending story
The next chapter in the development of e-commerce is being written by system operators, independent software vendors, design agencies and payment specialists such as Nexi, working in partnership to create the best online experience for merchants and customers. We brought together just some of them to look at how the story is unfolding in the DACH region
Money20/20 Europe’s Head of Content Gina Clarke tells Tim Goodfellow how the premier event stays evergreen by constantly refreshing that feedback loop
There are a wealth of industry conferences with slightly different focusses, but not many that can claim to have royalty and whistleblowers on the same bill.
It’s the sort of daring content we’ve come to expect from Money20/20 Europe, though – and this year it’s more than lived up to its reputation.
To maintain its status as the mecca for fintech and financial innovators, a lot of creativity goes on behind the scenes, and former financial journalist, now Money20/20 Europe content director, Gina Clarke, has a big hand in that.
“It’s like putting a story together,” she says. “I am contacting all the key players and finding the background in lots of research. But instead of writing the story, I see it play out on stage.”
The European iteration of the Money20/20 event, which takes place in Amsterdam, has a broad regional focus, and, as a result, catering to various jurisdictions and stakeholders can be a challenge. What apparently isn’t, is the organisers’ penchant for surprises.
Think flash-mob brass bands and an inland beach this year. That certainly shakes up the networking.
The show invited Prince Constantijn of the Netherlands, a vocal supporter of the local startup sector, to open the 2024 event and take part in the first discussion, while the main keynote speaker, ex-French President Franćois Hollande, reflects France’s rising standing in tech, particularly AI.
Then we come to that whistleblower – a one-on-one slot billed as ‘What the Wirecard Whistleblower Did Next: Pav Gill’s Confide’ with the man who uncovered one of the most significant financial scandals in European history and went on to found his own startup to
help avoid another. Confide makes it easier for employees to call out company wrongdoings – and for companies to act before a story hits the media.
Talking of fraud, a free signed advance copy of journalist Geoff White’s new book Rinsed (released June 13) about money laundering in the modern age came with the entry ticket price this year – a healthy indication of the organisers’ willingness to welcome all sides of the ecosystem.
If you’ve never been to Money20/20 Europe, USA or Asia, it’s hard to put into words the scale of these events. The RAI conference centre in Amsterdam is filled with colourful stands, booths and stages. Plus there’s plenty of other mini-events going on around it. There’s some showmanship in all this, clearly, but the content itself is paramount.
“We get our crystal ball out every year and try to predict what trends are coming up,” says Clarke. “I think this year, we’ve done a pretty good job.”
For Clarke and her team, the feedback from the previous year’s attendees plays
a big part in the decisions they make in organising the next event.
“We’ve listened and what they said was they want to book their time around the content. So we chose five big topics for 2024, programmed back to back.”
The clear structure meant people could make the most of the awesome networking opportunity that is Money20/20.
“We always think, how do we top last year? For me, it was about finding a place for everyone,” says Clarke. “We know that networking is so high on people’s priorities, so we looked at adding it into the content, which we did with the Singularity Stage.”
These first-come, first-served deep dives on particular topics, give opportunities for networking around a single topic focus
– ‘to hear some fabulous content and meet people who are also interested in the same content as you’, as Clarke explains it.
With any Money20/20 there’s also content that isn’t listed on the programme, including behind-closed-doors events that aim to ‘bring in the retailers, the insurers, the wealthtech people’.
All this is in the service of finding that ‘something for everyone’, which is a tough task when you have 100 countries represented, 8,500 attendees and 2,300 exhibitors. It’s one Clarke’s been willing to accept, though.
“The difficulty of being such a prominent European event is there’s different regulatory practices to think about, and different organisations with different needs,” she says. “Obviously, there is harmony in regulation for Europe, but from an implementation perspective, the UK is very different. And then you add what’s going on in LATAM or Canada or Australia. We’re trying to tell that whole story as a bit of a journey.”
The location for Money20/20 Europe helps, says Clarke. “Amsterdam is such a vibrant city and a banking hub in Europe, being in good reach for many high-profile
in the European loop. That’s especially the case when you have the European equivalent of Open AI – Mistral AI – being grown in France and the upcoming, world-first EU AI Act being introduced.
And that brings us to the overall theme at the heart of the 2024 conference, Human X Machine. Clarke says AI leaked into planning for every aspect of the show this year, but it was thoughtfully managed, attempting to cut through and provide some clarity about the technology to attendees.
Among of the five sub-themes, Signal vs. Noise was designed to help them ‘choose which path to follow’ and provide useful case studies, explains Clarke. Meanwhile, after a year when venture capital was less than adventurous, The Business Of Money sub-theme was designed to address ‘the whole profit-versus-growth conversation’, and another, The Customer Universe Of One, put the focus on customer centricity.
There’s obviously a keen awareness of the stuff that really matters, and Clarke also talks about the balance the show strikes between deep dives and something more
We always think ‘how do we top last year?’. For me, it was about finding a place for everyone
European banks.” And that’s not just the established players, many of whom have speaking slots at the conference, but the challengers too, which, she argues, aren’t really challengers at all any more, but an established part of the ecosystem.
Regardless of how many countries may be represented in total, it’s notable that Clarke admits: “When we look at our audience breakdown, the majority do still come from the UK.”
Of course, proximity helps, but their presence en masse is possibly indicative of the UK sector’s desperate need to stay
high level. As she puts it: “It’s OK to hear CEOs on stage deliver the headlines and get an idea of where the industry is going, but if you’re already embedded in that, you really want some tangible takeaways.”
That’s where the deep dives come in, talking about the slightly less sexy (but no less discussed) topics of digital identity, regulatory compliance and cybersecurity.
What stands out is that the team really builds the show around their customers – practising what should be an industry standard. So, if you want a conference that listens, this could be the one for you.
With 329 microservices, 1,757 APIs and 535 events, Intellect Design Arena’s eMACH.ai open finance platform is transforming the way banks operate. Intellect’s Global Consumer Banking unit (iGCB) has worked with leading banks across the globe for the last 30 years. Rajesh Saxena, CEO of iGCB, describes the five key trends that he sees driving technology change at the very heart of banks – and how they can devise a successful strategy to embrace it
THE FINTECH MAGAZINE: What are the main drivers of change when it comes to core banking technology?
RAJESH SAXENA: Over the last 365 days, I have spent significant time in understanding client needs and ambitions across our key markets. I have probably met more than 100 senior bankers. I have concluded that while each country and customer is different, there are certain common trends and common pain points
The first trend gaining momentum is the rise of open banking and open finance. The wave started with the UK and Europe and is now being required by most markets. The Middle East has also seen increased traction over the last couple of years
The integration of an open finance-enabled ecosystem in a bank can offer contextual and curated solutions and experiences for the end customer. In fact, iGCB has clients like Cater Allen in UK and OTTO in Germany who are leveraging open finance to deliver superior banking to their customers. We have similarly implemented open finance-enabled banking solutions in APAC, Middle East, Africa, and Oceania.
The second trend is the increased competition from fintechs and other banks. Banks are looking at options to disrupt the status quo and increase their addressable market by transitioning from a product provider to a marketplace where customers can find a product or service catering to all facets of their lifestyle.
The third key trend, which iGCB has been advising banks for the last few years on, is the use of cloud, either private or even, in some cases, public cloud. Cloud technology has
matured over the last five to six years and regulators and large banks are gaining confidence about its security aspects.
A couple of years back, when we were doing a core banking transformation for a UK private bank, we could not take them to a public cloud because the regulator was not ready. Today, the same customer is planning to migrate to an AWS cloud with us being the core technology partner. I am also happy to share that we’ve just upgraded India’s central bank Reserve Bank of India, which is one of our premier clients, to next-generation core banking and we have taken them to a private cloud on VMware.
The fourth trend, mostly seen in
Transformation is a long journey and you need to be able to work well with a vendor to deliver it. The cultural fit is very important. It can make or break the project
one is the EU AI act. These constantly evolving regulations, too, are motivating banks to consider transforming themselves to a more agile bank.
TFM: So banks globally are under tremendous pressure to transform. However, banking transformations are never easy. Can you talk us through a successful transformation and what, in your view, needs to be in place for that to happen?
RS: For years, banks were very reluctant to change their core. What most of them opted to do instead was to hollow it out and put systems in place around it that could take care of part requirements.
Trend#2
Marketplaces/ ecosystem partnerships
developed markets, is the focus on ESG. The banks’ customers are looking to be net zero, with the ability to greenify/reduce the carbon footprint created by their transactions. Once a niche product feature, now, it’s a fundamental requirement. A report by Alvarez & Marsal stated that the global annual revenue pool for banks related to environmental, social and governance products and services will reach €295billion, or $300billion, by 2030. So we can see the potential of ESG on a bank’s profitability.
Trend#1
Open banking/ open finance
The fifth and final trend is an increasing amount of regulation around privacy and security that banks have to cope with. The recent
But banks have now realised that, as a strategy, hollowing the core can only give you a limited benefit. It could still be phase one of your strategy, but if you really want to transform your bank and compete with the new-age digital banks, you need to have a comprehensive core with an ability to evolve.
Also, what we are seeing now is that banks are adopting multi-core strategies.
Take RBI as an example.
We built a bridge between RBI’s old core and a new core, so the bank could use either one or the other, depending on the requirements and what had been implemented. This coexistence capability is gaining traction amongst banks for core transformations.
Apart from the product and technology, I would also emphasise the importance of delivery strategy.
It might sound obvious, but most delays in implementations occur due to a gap in understanding between the bank and the technology provider.
As a partner in the bank’s transformation journey, we not only create a thorough plan but we also do detailed design thinking sessions with each client to create an implementation plan that focusses on the stated and unstated needs of the bank and prioritises business impact.
We are further building regional delivery teams to work with banks more closely. Strategies like these are further reducing the risk of large transformation.
TFM: So how does one create a powerful core? Are there some architectural tenets a CIO should consider?
RS: I strongly suggest that banks invest in a comprehensive core which consists of events, microservices, APIs, cloud, headless architecture and embedded AI use cases. Intellect is the first to bring all these elements together. We at Intellect call it eMACH.ai.
We moved all our architecture into eMACH.ai so that the APIs, microservices, events, are all open. It’s completely born on the cloud and that gives banks the ability to integrate, to scale up, and to connect with ecosystem players. We have also created a country-ready ecosystem for several countries, reducing go-to-market for banks.
Most of our peers are now in the process of moving from a monolithic architecture to this kind of advanced infrastructure. Our investment in eMACH.ai brings considerable advantages to us and puts us ahead of the curve. But, it’s not just to do with the architecture.
Intellect’s sweet spot as a company is between domain and technology. Intellect’s talent comes with deep banking expertise, and that really helps, because just giving banks a tech framework, which is what some of our competitors do, is not enough. We have depth and breadth in the financial services space. From lending to origination, savings accounts to current accounts, we are able to offer a comprehensive platform, built on the same architecture. Also, we co-create and co-innovate with the banks, and that also helps in the transformation journey. We have seen significant success with the co-create and co-innovate model with our clients in Africa.
TFM: You say that one of the things that sets you apart and one of the reasons
you’ve been successful in terms of some of the transformations you’ve implemented in various banks is the fact that you only work in this domain. Can you give an example of how that helps? RS: Having come from banking, I know financial services is not a simple domain, it requires deep understanding. Companies that are horizontal in nature will not be able to bring the vertical depth of knowledge that is required for it.
I’ll give you an example to do with AI. Today, AI is at the forefront of every conversation, including in the banking space. When we talk to people about AI most of them, because they use Microsoft Windows, will have an Azure Copilot bundled along with it. But having a horizontal AI play like that is not enough. What you really need to know is how to use
Intellect’s sweet spot as a company is between domain and technology. Intellect’s talent comes with deep banking expertise, because just giving banks a tech framework is not enough
AI to create, for example, an underwriting use case or a wealth use case or a corporate use case. Our credit-focussed Gen AI solution has created waves in the market with its capabilities in underwriting.
Those vertical domain use cases are the key and that’s why I’m of the firm belief that companies like ours, with a sole focus on the banking domain and 30 years of experience transforming Tier 1 banks across the globe, add significant value.
TFM: iGCB is a sponsor for Money20/20 Europe this year. Can you tell us more about the products you’ll be focussing on there?
RS: Money20/20 is a flagship event for iGCB. This year, we’ll be focussing on three things specifically. One is our Digital Engagement Platform, which is a single, common platform for the retail customer, the SME customer, and
the corporate customer. If you are a Tier 2 or a Tier 3 bank with a strong retail business, and a moderate-sized commercial business, you do not need two portals for them, because two portals come with huge expenses and involve a huge amount of work. So we have created one common, no-code platform for both. The advantage of no-code is that the bank itself can make changes on the digital layer – because time to market is very important. We believe that the Digital Engagement Platform could be a game changer for banks across the globe, including European banks still using legacy digital banking.
At Money20/20 we will also showcase how we can help banks implement dual-core strategy, our Gen AI platform built for banks and our digital lending suite, iKredit 360.
TFM: So, finally, what would your advice be for banks that want to implement a successful transformation? RS: I can’t emphasise enough the importance of choosing a platform that is open finance-enabled and completely cloud native. A platform is going to be with you for the next eight to 15 years, depending on your appetite, right? So you definitely need to choose one that has the latest architecture and which is completely cloud-native – not just ‘cloud-ready’ or ‘cloud-enabled’.
The second thing I’d say is that transformation is a long journey and you need to be able to work well with a vendor to deliver it. So the cultural fit of your organisation with the vendor is very important. It can make or break the project.
Finally, in my view, transformation has to be driven from the top. Sometimes we’ve seen it being driven by the technology group in a bank. Sometimes it’s being driven by the business group. And sometimes there is a friction between these two. But it has to be both a business and a technology agenda. All the parties have to be joined at the hip for this. You can have a great product, but if the culture piece, the team piece, the agile working, and the buy-in from both the business and technology groups aren’t there, it won’t be the success that it could be.
Technology giant FIS took a bold approach to delivering innovation for customers four years ago, which is simultaneously helping populate the fintech universe with successful startups. We talked to four key FIS insiders about the strategy
In April 2020, just as the pandemic took a vicious hold on economies across the world, financial technology company FIS bet big on innovation.
Its then newly created corporate venture investment division was given $150million to target promising startups, putting it at the forefront of the fintech-financing scene.
It had a specific focus on the fields of artificial intelligence, automation, analytics, security, distributed ledger technology and financial inclusion, and the goal was to target smaller companies that could contribute piece-by-piece to the overall portfolio of services that FIS was able to offer, enabling an agile and responsive approach to meeting specific customer requirements.
FIS further committed to partner with these companies, using complementary areas of strength, to help those entrepreneurs fulfil their long-term growth ambitions.
Four years down the track, and the first of the companies to benefit from the FIS strategy is now the most successful fintech in Africa. Indeed, payment
infrastructure provider Flutterwave, already a unicorn, recently revealed it was preparing for an IPO.
The investment in Flutterwave in 2020 was closely aligned to another major acquisition by FIS, which had happened the previous year, in as much as it opened the door on Africa to FIS’ then recently acquired merchant processor WorldPay. The deal allowed WorldPay to leverage Flutterwave technology to process domestic payments there.
As it turned out, the WorldPay/FIS merger didn’t pan out; FIS sold its majority
As the fintechs grow in their role, so will FIS
Johnny Moreland, VP Sales, FIS
stake in February this year, but the FIS/ WorldPay/Flutterwave colab had proved that this ecosystem-building strategy was sound. And, going forward, FIS is focussing on those smaller investments to unlock bigger potential long-term.
“The vision is a number of selective acquisitions,” said James Kehoe, chief
financial officer at FIS, at a recent UBS Investors Conference. “We’re trying to speed up the development cycle, and by that I mean we would buy a combination of very strategic assets that either bring a product or people capability to speed-up the development.”
A recent example of that is FIS’ acquisition of Bond, a company that offers enterprise-grade embedded finance solutions, and helps brands integrate financial services, from bank accounts to credit cards, so that these services can be flawlessly offered to customers as part of the emergence of banking-as-a-service (BaaS) business models. To make a success of this model, scalability is key and that’s what becoming part of the FIS portfolio gave Bond, says Roy Ng, co-founder and, following Bond’s acquisition, now EVP of Atelio by FIS, the new platform that leverages existing FIS technology to offer banking-as-a-service ‘building blocks’ for financial institutions, businesses and software developers.
“We have customers now that are publicly listed companies, using our platform to reach audiences that they
were not able to before,” says Ng. “Being part of FIS really opens up the opportunity for us to engage with financial institutions themselves who have ambition to drive embedded finance as part of their revenue and their strategic ambitions.”
For those involved, this doesn’t only represent a change to the way Bond does business, and the services that FIS is able to offer, but a more fundamental restructuring of how these services and capabilities are brought to customers in the market.
“It’s a really attractive value proposition that no other player in the industry can offer,” says Ng. “FIS is bringing the merchant side, the issuing side and the banking side all together.”
FIS has made a dozen or so similar investments over the past four years. Pre-seed and early-stage investments are always high stakes, but FIS derisks them by working closely with the FIS Accelerator. A flagship, 12-week mentoring programme for early-stage companies (generally created in the previous 18 to 24 months), applications are open for it's ninth year. Flutterwave, Neural Payments and Themis are notable graduates.
“They get a lot of different mentoring, they get to speak to a lot of our customers
Being part of FIS really opens up the opportunity for us to engage with financial institutions themselves
Roy Ng, Bond
and understand and test some of the ideas,” says FIS Accelerator lead Tatyana Kratunova of entrepreneurs’ experience on the programme. “We support with funding for proof of concepts and we really look at what are the right use cases that we could align on as the future of innovation. We look at what it means for our customers, how we can ensure they can have the right technology to progress their own businesses, and we look at the connectivity of the overall ecosystem for that.”
This approach yields two core benefits. Firstly, it increases the scalability of solutions from providers who may otherwise be limited by the specificity of their application or by their small size. FIS’ support enables smaller providers to scale up their capacity to match their customers’ needs.
In addition, rumblings from the Federal
Deposit Insurance Corporation and Office of the Comptroller of the Currency in the US hint at increasingly intense regulation making its way towards the fintech sector. This may mean that fintech companies who have never had to deal with this kind of scrutiny need to comply fast, or else risk having their services shut down. In this scenario, being able to rely on an experienced, compliance-minded organisation like FIS can provide a further boost to scalability.
“The difference in our strategy over the last couple of years is in pushing our services more directly to the frontline – servicing those fintechs directly, in conjunction with the services that we're providing to the banks as well,” says Johnny Moreland, VP of sales at FIS.
“They [the fintechs] are concerned that as they grow their user base, their systems [aren’t] going to be scalable to handle the transaction volumes that they need. The breadth of our services brings infrastructure to support them in their growth… whether that’s call centre support or card production or card processing – all the things we’ve had in the market for more than 50 years.
“Our ability to deliver those services on a consistent basis is what they're looking for. And then FIS benefits from the relationships that we've expanded into the ecosystem.
We have a strategic partnership team that walks with the companies throughout their stages of investments and funding Tal Sigura, FIS Venture Investments
“Our mantra is to be able to service companies that are servicing the end users on the front end. And as the fintechs grow in their role, so will FIS.”
The second core benefit is that it allows FIS customers to mix-and-match different features, products and solutions from within FIS’ own ecosystem, allowing financial institutions to deploy gradational updates to achieve the most desirable featureset.
This ecosystem-like structure represents a more fundamental re-imagining of how banking services are evolving. A 2022 report by EY doubled down on predictions it had been making since 2020 for the potential of API-based applications to allow financial institutions to ‘move out of the traditional
bank perimeter, embedding themselves in the value chains of other industry domains’.
Such is the promise of this approach, that one report by Grand View Research estimated the banking-as-a-service market to be worth as much as $19.65billion in 2021, with expected CAGR growth of 16.2 per cent from 2022-2030.
FIS frames its own portfolio of services along similar lines, promising the ability to ‘incrementally modernise their bank and services’ as part of FIS’ BaaS provision. For Tal Sigura, head of FIS Venture Investments, the importance of this path is clear.
“This year we’re focussed on the Atelio business and three pillars come to mind: embedded finance, automated finance (accounts receivables, accounts payables), and fintel (financial intelligence).”
Sigura posits four key mandates in ensuring the continued success of FIS’ strategy: “The first one is knowledge, helping founders and operators solve their biggest challenges. The second is product integrations, and making those introductions to the right partners. The third is our customers: we like to facilitate introductions to the right fintechs or banks. And lastly, it’s the investment ecosystem. We like to introduce our founders to the VCs and corporate venture capital. Our strategic partnership team walks with the companies throughout their stages of investment and funding.”
We support with funding for proof of concepts and we really look at what the right use cases are that we could align on as the future of innovation
Tatyana Kratunova, FIS Accelerator
Then, to make sure that everybody in the ecosystem feels part of something bigger, there are the FIS Fintech Hangout networking events that rotate around US cities and bring together the entire community, informally – cool events designed for a crowd of forward-thinkers, helping to stimulate even more opportunities for growth.
In acquiring or working alongside cutting-edge startups with promising applications, FIS is shaping not only its own supernova future but that of countless new fintech stars.
The Payment Choice Alliance is pushing all the major political parties in the UK election race to make manifesto commitments to compel businesses to accept cash – since there’s clearly no shortage of people wanting to use it. Chair of the Alliance, Ron Delnevo, says the UK is not the only country to rethink the wisdom of going cash-free
Sweden was the poster child for cash-free lobbyists everywhere. By 2017, it seemed unstoppable. Cash access had been slashed, with ATM locations substantially reduced, most
remaining bank branches refusing to handle cash over the counter, and many businesses declining to accept cash.
In fact, a ‘cashless’ Sweden became such a certainty that the prestigious Wharton Business School saw it sensible to publish an article in 2018 in which 24 March 2023 was identified as the day it would happen. But in 2023, cash use in Sweden actually increased over 2022 levels!
So, where did it all go wrong for the cashless collaborators?
Well, firstly, the pro-cash movement in Sweden stubbornly refused to accept the seemingly inevitable. They campaigned with great energy and found that their message wasn’t falling on entirely deaf ears.
And then they got a bit of help from an unexpected quarter: Vladimir Putin.
Long before the invasion of Ukraine, the Russia leader’s posturing and a spate of suspected Russia-backed cyberattacks around the world had understandably
made many people in Sweden nervous – including the government. Its concerns became so acute that in 2019 Swedish citizens were advised to keep a week’s supply of cash ‘under the bed’ as insurance against man-made or natural disasters rendering digital payments inoperable. (I leave you to decide if Mr Putin is a man-made or natural disaster.)
However, the Swedish government realised that there was no point advising citizens to keep cash at home if banks were refusing to supply it. So it took steps to make the Swedish banks change their ways and on January 1, 2021, an amendment was introduced to the Swedish Act on Payment Services, requiring banks to provide access to cash services.
‘Cashless’ bank branches were outlawed, with banks compelled to offer over-the-counter cash withdrawal and deposit facilities for customers. And all this was before Russia actually invaded Ukraine.
The rumour now is that as and when the Eurozone brings in a law mandating businesses to accept cash, Sweden will follow suit. The poster child for cashless is clearly never going to get the opportunity to reach maturity.
Meantime, in the UK, perhaps sensing that Sweden was about to go very wrong for them, the cashless collaborators stepped up their efforts to impose their will on the British public.
It was a great drawback, of course, that cash remained rather popular in the UK Indeed, the number of free-to-use ATMs – ATMs deliver 95 per cent of the cash used by the public in their daily lives – peaked at more than 54,500 in 2017. Cash was becoming conveniently available everywhere. What’s not to like about that, for the man and woman in the street?
Mysteriously, however, even though the public were very happy, at the end of 2017, the UK ATM Network LINK announced that it had decided there were too many ATMs in the UK. Its way of addressing this ‘excess’ was quite brutal. It told ATM operators that the already tiny payments – the lowest in Europe – they received for cash withdrawals were to be further reduced by up to 20 per cent.
Since LINK announced the reductions in payments for ATM cash withdrawals, the number of free-to-use ATMs has fallen from that 2017 peak of above 54,500 to less than 37,000 today – a fall of more than 32 per cent, or roughly one third.
Meantime, more blows were being rained down on access to cash withdrawal and deposit facilities. On average, two British bank branches closed each day between 2015 and the end of 2021 – and the Big Five banks closure programmes have continued unrelentingly since then. And then the ‘cashless’ collaborators also got a bit of help from an unexpected quarter: Covid.
Suddenly, in 2020, the British public were basically told they were not allowed to leave their homes. Between 2019 and 2021, the value of online sales in the UK went up from £75billion to £120billion, an increase of 60 per cent. Almost none of those additional sales featured cash.
On top of that, when the public did actually make it to bricks and mortar retailers, they often found their cash was refused. Health concerns about
handling cash was the main, though unsubstantiated, excuse.
So, taking all the negatives stacked up against cash since 2017, have the British public given up on cash as a payment method? Not a bit of it.
Today, the much-depleted LINK ATM estate continues to dispense 70 per cent of the value of cash dispensed pre-pandemic – and post offices, where cash services are available over the counter, have seen a substantial increase in the value of both cash withdrawals and deposits.
All this cash activity meant that UK Finance – the trade association of the British banks – was forced to report that in 2022 cash use for retail payments had actually risen. A seven per cent growth in transaction numbers year-on-year is really very impressive.
And then the roof started to fall in on those seeking to impose cashless on the British public.
Around the country, organisations large and small that had gone cashless were making the headlines when they started to recognise that their customers were very unhappy and that cashless needed to be binned. There are many examples.
UK Finance was forced to report that in 2022 cash use for retail payments had actually risen. A seven per cent growth year-on-year is really very impressive
Perhaps the first great piece of news for cash was Greggs the bakers making clear after Covid that all its 2,400 stores across the UK were definitely accepting cash again. Greggs, of course, had the wisdom of its commitment to cash underlined when, in March 2024, an IT glitch”meant that cash was the only payment method it could accept in its thousands of stores!
In March 2023, a kids’ uniform outlet in Worcestershire, The School Shop, reversed its cashless policy – had customers given it a hundred lines: “You Must Not Tell Us How We Can Pay”?
Greene King, the pub company, in
October 2023 took the decision that all its pubs would accept cash again. In November 2023, the Royal Albion Hotel in Broadstairs, where the famous Chariots of Fire athletes trained for the 1936 Berlin Olympics, abandoned the race to cashless.
In March 2024, York City Council reversed its decision to make its car parks cashless, having been faced with relentless opposition from local residents. Also in March 2024, a major veterinary group, based in Herne Bay in Kent, admitted it had been barking up the wrong tree and started accepting cash again.
Not far away, The Glass House pub in Ashford, Kent, made the same move.
Customers telling the publican that they would never drink there again, meant it didn’t take long for the cash tills to start ringing again.
Daventry Town Football Club found that cashless was an own goal, so kicked it into touch in April this year and welcomed its supporters’ hard-earned cash again.
Most recently, the Imperial War Museum in Manchester, renounced its cashless policy. Faced with criticism from so many in the city, including the Manchester Civic Society, it was inevitable it would concede this particular battle.
Not all businesses are listening to their customers, of course, which is why we need legislation compelling them to accept cash.
ASDA for one seems to be deaf to customer threats to boycott its card-only petrol forecourts. It’s a curious stance to take when Sainsbury’s and Tesco steadfastly keep the flag for cash flying at their pumps.
What all these examples illustrate is that the public will not be told how they can and can’t pay. So, the Payment Choice Alliance is pushing all the major political parties to make manifesto commitments in the upcoming election to pass legislation to compel businesses to accept cash. This reflects the response of the British public to a YouGov survey in 2023, which revealed that 71 per cent of adults want a law put in place, guaranteeing they can use their cash, when and where they choose.
Many neighbouring countries already have such legal measures in place, including the Irish Republic. But businesses really shouldn’t need to be forced to do the right thing by law. All British businesses that say they truly care about their customers should be accepting cash now.
One billion digital nomads are predicted to be roaming the world by 2035. European mobile bank bunq aims to go with them, says Chief of Staff Bianca Zwart
the previous 12 months. More than 12.5 million users are now logged on.
“We’ve seen a shift in people working remotely and living internationally. Home, work, travel are all just nicely blending in,” says the bank’s chief of staff Bianca Zwart.
According to Statista, more than 35 million people – roughly half of them millennials (28-43 years old) – had already placed themselves in the digital nomad employment category in 2022. That’s likely a ludicrously conservative figure now, given the proliferation of visas made available over the past 12 months by countries chasing the ‘nomadic dollar‘ or, in some cases, just an injection of youth into an ageing demographic.
well-known companies in the US, a recent Gallup survey showed that eight in 10 remote-capable employees there expect to work hybrid or fully remote this year. And a Gartner survey of bosses in 2022/3 showed 82 per cent plan on incorporating more remote work and digital nomad-adjacent policies for their employees in the future.
But these seismic shifts in lifestyle haven’t, by and large, been ones that legacy financial institutions have kept up with. And, in Zwart’s opinion, that comes down to the wrong strategic priorities being baked into their organisations, as much as a technology timelag.
There’s a handy feature on the bunq mobile banking app that allows users to review and share experiences that they’ve paid for on their card. Want a great café in Zagreb where you can drink coffee for hours over a laptop without getting the hard stare from staff? Or perhaps a fab shabby-chic pension in West Berlin that rocks Weimar-era style at pre-War prices. They’re the kind of crowd-sourced recommendations on which the world’s new generation of worker-travellers thrive. Liberated from conventional employment routines, they’re highly mobile, constantly updating, digitally well-equipped – and creating a demand for services fashioned in their own image. Products like bunq, the ’bank of the free’.
Founded in 2012 in the Netherlands, in 2023 it became the first neobank in Europe to turn an annual profit (€53million), driven by a huge surge in customer demand over
And it’s not just the ‘pull’ but the ‘push’ driving what Harvard Business Review terms these ‘fluid’ as opposed to ‘solid’ lifestyles – ones noticeably not rooted in one place or one concept of community.
In the UK, for example, more than seven in 10 people in a Post Office survey of 2,000 UK employees said they didn’t just like the thought of travelling while working remotely, but were also actively planning to do it. Perhaps that’s partly due to the fact that, in the current cost-of-living squeeze, a UK salary goes a lot further abroad. As one nomad puts it: “Honestly, if I’m going to struggle, I’d rather struggle in the sun.”
And employers have responded. Notwithstanding some backsliding by
“A lot of sectors have already been playing to these needs. We believe that something as vital as your finances – the banking sector – cannot stay behind,” she says.
So how has Bunq’s approach as a bank been different?
“In the beginning, instead of chasing vanity metrics, we put a lot love and effort into creating something of value,” says Zwart. “We had a very simple conviction: if we built a product that people truly love to use, they’ll be willing to pay a couple of euros for it. User-centricity is in our DNA; you can feel it in the product.
“When I use the app, it feels as though it’s tailored for me. That’s a fundamental shift, focussing on the user, rather than focussing on what serves the bank.”
It was important that unity of purpose was reflected across the whole organisation from the start, she adds – and Zwart speaks as one who was recruited the year of bunq’s launch as a junior member of staff, working her way up, before leaving to do the hard yards as an entrepreneur, and returning in 2022 to become second-in-command to founder Ali Niknam.
“The company structure completely mirrors the user journey,“ she says. “We don’t create roles for the sake of creating roles. Rather, we look at ownerships, as we call them – validated problems that our users have. Someone creates an ownership and truly focusses on that.
“Secondly, any proposal within the bank starts with the most important question: what is in it for our user? If you cannot answer that question, we’re not going to do it. And, last but not least, we work with great, ambitious people who just truly want to get things done and make the experience better every day. We really make sure that our commercial reality is in line with our user happiness.“
For a bank focussed on serving not just the financial but the lifestyle needs of the digitally nomadic, America is a key market. Americans make up over half of all workers who assign to the label, while the US is one of the top three destinations worldwide for nomads, alongside Spain and Thailand.
“We want to focus on this very specific group that I think suits our proposition well,“ says Zwart. “People that have ties to both Europe and the United States, so people on both sides of the Atlantic, who want to have accounts in USD and Euros, and to seamlessly transfer between the two. Our product is amazing for that.“
bunq inhabits similar territory to N26, Tomorrow, Monzo and Revolut in Europe. But, unlike them, it waited significantly longer to seek external funding, Niknam instead choosing to bootstrap its expansion until 2021 when it set the record for the largest Series A funding round for a European fintech at €193million.
It’s a fundamental shift, focussing on the user, rather than focussing on what serves the bank
That injection of cash by Pollen Street Capital was used partly to buy an app for splitting expenses, Tricount and the Irish business lender Capitalflow, partly to invest in Al-driven customer service and, having expanded to 30 European countries, it also gave bunq the resources to look at re-entering the UK after Brexit and establish operations in the US.
cultural and economic shift: Mobile working is becoming the new norm
“London is a digital nomad hub – not just the people travelling there, but also for people from the UK who travel abroad a lot. Spain is one of the hot spots for them and we can offer them that pan-European experience – and not just in currencies.
“For example, if you need to pay your landlord in Spain there are not many people who will accept a non-Spanish bank account. We offer just that. You can open a Spanish IBAN as soon as you land in Spain, so you have everything set up and you can truly live like a local.”
Home, work, travel are all just nicely blending in
The UK product launch, meanwhile, will be something of a re-run for bunq, which was operating there up until Brexit. In its absence, of course, the banking landscape has changed somewhat. German neobank N26 left, but Revolut (also now in profit, but still without a UK banking licence) has expanded. Fully UK-licensed Monzo now regularly makes the charts as a bank for digital nomads, working both inside and outside of Britain.
Work culture has altered, too, over the past four years. Many more millennials and Gen Z-ers have entered the workforce –the generations who were most enthusiastic about changing location, according to that Post Office survey –while a third of UK companies now claim they allow employees to log on from different countries.
“We love the UK market and our product is a great fit for it,” says Zwart. “And that’s not based on assumptions… we saw that when UK customers were able to use it before, because it basically gives them the ability to bank like a local.
As the Harvard Business Review observed, the image and reality of a nomadic lifestyle are often very different. “Unrooted living requires effort, including finding short-term housing, work, health care, financial services, and education for nomadic families,“ it says, adding, “These are also market opportunities.“
And that’s what bunq has seized on. The bank is all about making life – not just money management – easy for users. It was one of the first to completely open up its API ‘because it adds more value to the user, so why wouldn’t we?’ says Zwart. And, like its user base, its horizon is endless.
Back in 2015, Pieter Levels, another Dutch entrepreneur and founder of the NomadList – a subscription-based online community, used by millions of nomads and would-be nomads every month, with 35,000 paying members – predicted that by 2035 there will be one billion digital nomads. They will all be looking for services tuned to their needs.
“We’re already on our way to becoming a global neobank,“ says Zwart. “Next is looking at how we can make our users’ lives even easier, maybe beyond banking by doing great partnerships and integrating into services that our users already use.“
The meteoric rise of the digital nomad as a customer segment has exposed gaps in insurance and banking provision that imaginative startups have started to fill. Natalie Marchant explores the world of the remote worker, the risks and benefits
“The biggest thing for me is being able to travel and learn more about myself and the world,” says business consultant John Munn, explaining why he joined the 35-million-strong tribe of digital nomads.
Munn describes himself as a ‘time optimisation expert’ who – perhaps appropriately – helps entrepreneurs work less. He also runs an environmental business that helps clients offset their carbon emissions with his partner Eliana Vanekova. Together, the 29-year-olds have spent much of the past few years working remotely – most notably in Spain and Thailand, but they also used those as bases to explore further afield. And they’re far from alone in escaping the traditional 9-5 work routine.
The number of digital nomads looks set to soar, with more than 50 countries around the world now offering specific visas to capitalise on the growing trend for a self-determined work routine. Indeed, a recent study showed that Google searches for ‘digital nomad visa’ went up by a staggering 1,135 per cent this year, prompted by the addition of Spain and Italy to the ever-growing nomad-friendly list. Just as the booming digital nomad sector offers opportunities for local economies,
particularly in parts of the world badly hit by lack of tourism during Covid, it also opens the door to new markets for digital platforms servicing their financial needs abroad – be it foreign exchange services, e-wallets or, for when problems arise, insurance.
While there are many borderless banking options already on the market, traditional insurance models can find it hard to meet their needs – which is where the opportunities lie for neobanks, insurtechs and the more agile legacy insurance providers.
Dutch neobank bunq is one of the latest companies seeking to capitalise on the remote working trend by partnering with insurtech Qover to build out its product offering for digital nomads. Its Easy Bank Pro XL plan enables users to activate travel insurance through the Activities tab of the bunq app, as part of its commitment to making borderless banking seamless and creating a portfolio of other services around the needs of its customers.
Similarly, US-based WorldTrips Insurance Services earlier this year launched its Atlas Nomads policy designed for an era ‘where remote work is not just a possibility, but a lifestyle’, while France-based insurtech Qiti in 2023 launched its AI-driven health insurance app targeted at digital nomads and frequent travellers.
So what exactly are digital nomads?
Digital nomads are location-independent, or remote, workers who use technology to carry out their business wherever they choose to be in the world. They are similar to more traditional expats in that they both live and work in a country that’s not their own, but there are some notable differences in lifestyle and commitment. Expats tend to move to another country for work or retirement, often
on a semi-permanent basis, while digital nomads are far less likely to establish roots. Accordingly, expats are likely to build a life in their host country, and work on-site for a particular company or organisation, while digital nomads have tended to be freelance or business owners and have more of a ‘visitor’ mindset – giving them greater flexibility to travel as and when they see fit.
That said, digital nomads are increasingly also salaried employees who have permission to work remotely. In the US alone, the number of digital nomads with traditional jobs rose by nine per cent in 2022, from 10.2 million in 2021 to 11.1 million, according to consultancy MBO Partners. This was on the back of the number of digital nomads doubling in 2020 and increasing 42 per cent in 2021.
Digital nomads are generally assumed to be highly skilled and tech-savvy, with many working in fields such as IT, digital marketing and education services such as language teaching and tutoring – although people working in more ‘traditional’ professions such as law and accountancy are increasingly working remotely abroad, as well.
Long hours and working at odd times of the day from those ‘back in the office’ is a common challenge for digital nomads in very different time zones – even if having a break from the traditional 9-5 work routine is the key attraction in itself.
Then there can be language barriers and, sometimes as a consequence of these, loneliness. Some digital nomads get caught out by realising that they do eventually miss the comforts of home, and, even if they really enjoy living in a particular country – unless they have a good visa option – moving on to somewhere else is going to be inevitable at some point.
In addition, there can be practical hurdles to overcome, most notably technological
ones. Wifi needs to be good to stay connected, while technical support and other assistance – not to mention electronics stores – can be few and far between in more remote locations. If a laptop or mobile suddenly dies, for example, replacing it quickly can be a fraught experience, which is where good insurance for technology and income cover can prove invaluable – navigating your way out of problems abroad can be challenging, especially if you’re based in one of the more exotic locations high on nomads’ destination list, such as Indonesia or Costa Rica.
Borderless banking and financial services have greatly matured in recent years and leading the way have been online banking apps such as Wise (formerly TransferWise), Revolut and N24, whose benefits include multi-currency accounts, real-time exchange rates and competitive ATM withdrawal fees wherever you are in the world.
Incumbent banking giants such as JPMorgan Chase have also sought to target the borderless banking market with the launch of its online bank Chase, which offers fee-free debit cards for use abroad and also relies on real-time exchange rates.
But while companies such as William Russell and Expat & Co have been providing insurance for expats for some years, insurance offerings for the bespoke needs of digital nomads
remain comparatively few and far between. So what are they looking for, and what should insurance providers seek to provide if they want to tap into this growing market?
Centuro Global is a company that helps businesses expand globally through its tech-driven platform, which supports businesses on global talent deployment by navigating visa regulations, tax requirements and other issues.
When it comes to remote workers selecting insurance, Centuro Global CEO Zain Ali advises: “Nomads should take a ‘Goldilocks’ approach to selecting
Knowing what kind of activities you can do is really important. We knew we’d be riding mopeds in Thailand, but a lot of insurers exclude elephants
John Munn, digital nomad and business consultant
insurance. If your coverage is too limited, you’ll just be at risk of falling through the cracks if an unexpected disaster strikes. But if your coverage is too broad, you’ll just be throwing money away – for instance, there’s no need to buy a package deal that features home insurance if home is wherever you lay your head.”
When Munn and Vanekova set off to be digital nomads, insurance was something they took very seriously. Using a popular UK price comparison site, the pair were recommended to take out backpackers insurance – digital nomads were less of a trend then – and they chose a one-year policy that covered the world, minus the US as they didn’t plan on travelling there.
However, they’re the first to stress how important it is to read the finer details of insurance policies. “All of them are slightly different, so we built a shortlist and then read the contracts specifically,” says Munn.
“Knowing what kind of activities you can do is really important. For example, when we were travelling, we knew we’d be riding mopeds in Thailand but a lot of insurers exclude elephants [which are commonly on a nomad’s to-do list].”
It’s not just elephants. Many adventure sports, such as surfing, are specifically excluded by insurers – and yet it’s precisely the type of thrill many nomads seek.
When it came to health and accident cover, Munn and Vanekova made sure they had repatriation and indemnity, but were also aware that they could pay for certain aspects of healthcare privately and at a considerably lower price than at home, should that be required.
They were also covered for baggage, passport and cash loss, but steered clear of additional policies for mobile phones and technology that often be replaced far cheaper in Asia than in Europe.
Such a detailed approach to selecting insurance is advocated by Neville Mehra, co-founder of Genki, a German startup that offers a health insurance subscription service, supported by insurers Allianz, Barmenia, and DR-Walter. It currently has more than 20,000 digital nomads signed up in more than 170 countries.
“Digital nomads, by definition, typically spend time living in, travelling between and working in multiple locations –sometimes even in completely different parts of the world. And traditional health insurance isn’t designed to cover people who have that kind of lifestyle,” says Mehra.
designed to cover people who have that kind of
Neville Mehra, co-founder, Genki
“Most local health insurance and national health systems only cover people in their home country. Sometimes they offer international coverage, but it’s typically limited to short trips abroad and often comes with a lot of restrictions on the types of activities and the types of treatments that are covered.”
Founded by travellers for travellers, in 2021, Genki launched a worldwide travel health insurance subscription called Genki Explorer for people who want the ‘flexibility to change plans on a moment's notice’. Two years later it added Genki Resident, a long-term international health insurance with complete health cover, including dental and mental health care, pregnancy and childbirth, physiotherapy, and alternative medicine.
“Travel health insurance is great for digital nomads who are travelling for a few months, and who also have local health insurance or access to the national health system in their home country,” says Mehra.
“But those digital nomads who plan to travel for a few years at a time, and those who do not maintain any other health insurance or access to the public healthcare system in their home country should instead opt for international health insurance, as it offers long-term coverage and may also cover preventative care, vision, dental and maternity/childbirth.”
There is, of course, another very good reason for digital nomads to take out health
insurance for the duration of their intended stay: it is very often a key requirement if applying for a digital nomad visa. But there are other policies that can be invaluable for digital nomads that may be less obvious –for example, if their technology fails or they lose the ability to work for another reason – and which are generally not covered by traditional travel insurance policies.
As Centuro Global’s Ali advises: “Nomads almost always depend on their laptops to make a living, so technology insurance is a must. The life of many digital nomads is quite comfortable, particularly for those taking advantage of geographical arbitrage to earn US or UK salaries while living in the developing world. But one accident could leave you both unable to work and stranded a long way from home. That’s
enabling users to sign up online for gadget insurance from wherever they are within two minutes. Claim-making processes need to be quick and easy to complete online, too, and not require an expensive phone call abroad during office hours.
The best policies are built around the traveller. SafetyWing, for example, offers continuous coverage for 30 days (15 for US residents) for every 90 days abroad and flights home in an emergency.
As for Munn and Vanekova, they are now back in the UK. The appeal of having the same home to go to and a job in an office with colleagues was extremely tempting for Vanekova.
“It has been very interesting and constantly changing, but we have been doing it for five years and I think I’m
Checking out:
The number of digital nomads opting for an alternative workstyle is
set to soar
why we’d strongly recommend nomads to think about getting income protection, especially those who are self-employed.”
A nomad’s choice of insurance also needs to reflect their personal mode of remote working.
“Digital nomadism is a spectrum,” says Ali. “There’s a difference between someone who takes a ‘workcation’ every now and again and a fully-fledged nomad, out on the road for months at a time. Each will require different forms of cover, depending on how long you’ll be away from home and how much country-hopping you plan to do.”
Insurance providers looking to attract digital nomads must also consider how their tech-savvy clients could best access their services should they need them.
For example, 24-hour emergency telehealth services such as those offered by Allianz Care can be invaluable if someone isn’t within easy reach of in-person medical services. Simplesurance lives up to its title by
There’s a difference between someone who takes a ‘workcation’ every now and again and a fully-fledged nomad, out on the road for months at a time. Each will require different forms of cover
ZainAli, CEO, Centuro Global
starting to lack stability,” she explains. “It’s been amazing, and we’ll still travel more than just a week’s holiday every year, but we’re looking to form a base somewhere.”
There’s a lot more of the world to explore and they might yet move on. Meanwhile, millions of 20- 30- and 40-somethings are looking to follow in their footsteps, fashioning a new, borderless, flexible approach to living and working that will continue to challenge banking and insurance providers.
There’s a lot more that can be done to improve consumer confidence in online transactions and reduce merchant losses in the DACH region, says G+D’s Stephan Hackenberg. The answer is less not more complexity
E-commerce payments fraud is an increasing problem in the DACH region, as it is across the globe.
Mastercard’s, report, E-commerce Fraud Trends And Statistics Merchants Need To Know In 2024, states that two out of every three online retailers in Germany identified an increase in e-commerce fraud in 2023, and more than 85 per cent of online merchants in Switzerland.
While that’s partly a reflection of a year-on-year increase in online sales – in Germany, for instance, 78 per cent of 25 to 50-year-olds having ordered and purchased items online in the previous three months – it still has a major impact on a business’s bottom line.
Analytics company CRIF found that 94 per cent of online stores in Germany have been affected, 20 per cent of them suffering losses of more than €100,000. In Switzerland, 86 per cent had been hit by losses, and in Austria 64 per cent. The vast majority of e-commerce companies that CRIF interviewed felt that fraud risks had risen over the past 12 months.
However, arguably the bigger problem facing the DACH e-commerce and payments sphere is the perception gap between merchants and their customers.
A survey by fraud prevention solutions provider Riskified, published by Forbes, showed German respondents are more nervous about making online payments than merchants believe them to be. While 53 per cent of merchants said their customers felt safe, only 34 per cent of consumers agreed. There were similar sentiments in other DACH countries.
Their crisis of confidence has resulted in – and possibly been exacerbated by –them being presented with a plethora of
alternative payment methods. Although PayPal remains the method of choice for 46 per cent (Statista) of online shoppers, DACH is a particularly fragmented payments region, which perhaps explains why cash is favoured by more people in Germany, Austria and Switzerland than in any other part of Europe.
Stephan Hackenberg leads the global eCOM paytech solution sales team at payments security company G+D, where he’s responsible for security-enhancing solutions, working with the digital powerhouse division of G+D, the paytech Netcetera. He believes the unintended consequence of market and consumer reaction to fraud risk has been to add counter-productive complexity to new security measures.
The DACH region [is] highly fragmented when it comes to e-com payments, adding real complexity to any potential fraud prevention solutions
“The wariness of consumers in the DACH region is exacerbated by the issues faced by its banks which, with their legacy systems, tend to be a bit slower to implement the very solutions required to tackle the issue,“ says Hackenberg, who is based in Munich. “This has led to the DACH region becoming highly fragmented when it comes to e-com payments, adding real complexity to any potential fraud prevention solutions.
“Alternative payment methods have grown and leapt into that space, and so
there are multiple different schemes in the region, which really is a challenge for merchants and payment services providers (PSPs). Supporting a plethora of different payment methods in that market is cumbersome.”
He adds: “It’s also research and development-prone and companies have to certify their solution, needing strong partners to do that, all the while being attacked by fraud and therefore facing uncertainty from shoppers.”
Whether or not they realise it, there is clearly a job for merchants to do when it comes to building customer confidence, and G+D believes that can be achieved with risk-reduction solutions that don’t introduce the kind of friction that is known to be a turn-off for shoppers, leading, in the worst-case scenario, to cart abandonment.
Traditionally, merchants have sought to increase check-out ease and speed using methods like card-on-file payments, where they would store a customer’s payment details for seamless future transactions. However, this has led to instances of customers’ details being compromised when data breaches have occurred, and potentially added friction back into the process if cards expire, are lost or stolen. Every declined transaction forces the customer to go through authentication all over again.
Yet, newer network tokenisation technology allows customers to use unique, merchant-specific tokens in lieu of their cards to complete transactions –reducing the risk of data breaches or fraud because no actual card data is transmitted. G+D offers network tokenisation via tools like its eCOM Tokenizer solution, providing
aggregated original scheme-based, card-on-file tokens of the leading brands like Mastercard, Visa, Elo, Discover and others. It’s an approach that goes hand-in-hand with its implementation of Click-to-Pay, successfully launched with several PSPs, enabling thousands of merchants to offer convenient guest checkout, says Hackenberg.
G+D also offers the first EMVCo-approved 3-D Secure technology in Europe, providing an extra layer of biometric authentication behind transactions to verify customers through its Convego® AUTH-U offering, based on the global industry alliance FIDO’s payment authentication standard.
It ‘transforms two-factor authentication into one effortless action’, says G+D. Its website claims that this reduces cart abandonment by 70 per cent by offering ‘up to 85 per cent faster’ transaction speeds. Its exchange of 10-times more data points also improves transaction risk assessment and risk reduction, which, says G+D, shields businesses from fraud.
The company believes this tech makes ‘guest checkout… as easy as in-store payment with no passwords or account details to remember and all major debit and credit cards stored in one convenient wallet, requiring customers to only enter their details once, with registration via biometric authentication further streamlined when used together with mobile apps and browser-based web applications’.
“It’s about making the checkout experience much easier while providing the security of card schemes, which, –especially for high-value transactions, is of utmost importance to DACH market e-commerce,” says Hackenberg. “At the same time, we are also keeping a close eye on the account-to-account (A2A) transfer options emerging in the market. We’ve seen that account-to-account payments in other regions of the world are really solving consumer needs.”
Most recently, Berlin-based payment processor Micropayment partnered with Sweden-based open banking platform Tink to add Pay by Bank to its payment offering across the DACH region. And open banking platform TrueLayer, which is one of the first to join the SEPA Payment Account Access scheme, also recently indicated it was doubling down
on its efforts in the region, having seen significant year-on-year growth in A2A payment volumes in Germany since 2021.
“We’re also looking into making customer onboarding itself secure, using banking apps as a means of second-factor authentication,” says Hackenberg. “We strongly believe in FIDO for this.
“We don’t see one-time passwords via SMS as the future. Instead, pass keys combined with biometrics will be a very important factor. Getting people to use these in a natural way will be central.”
The third Payment Services Directive (PSD3), meanwhile, may help consumers feel more secure.
“PSD3 is the scheme being talked about all over the place, with providers asking what’s coming with it, when it will be implemented and how it will improve on the PSD2 regulation in terms of inclusion, security, convenience and, of course, authentication,” says Hackenberg.
G+D is well-placed, he says, to develop next-gen payment technologies that meet these specifications.
“Looking at both sides of the coin, we serve customers in the e-com space (the acquiring side)as well as leading issuers, which gives us great insights when it comes to providing these technologies.Putting the consumer back in control of what they're doing is another important angle to ensure a confident shopping experience,” he explains.
Partnerships are a key enabler for G+D – with PSPs like Nexi now in the DACH, banks and paytechs.
“We have some contact directly with merchants if they do their own orchestration, for example – and orchestrators themselves are one of our main customer groups, providing our solutions to merchants,” he says.
“We have to be close to the merchants and, for the most part, we do it through our partners and even vice versa, bringing the partners to customers if we can’t provide the technology.
“Cooperation is really key and once a year, we invite people around to Lake Stamberg, close to Munich, for our innovation summit, bringing together keynotes and leading speakers from across the industry, developing new ideas and really making use of our memberships of EMVCo and other organisations.
“Partnerships will be key to driving forward payments technology and innovation in the region. Nobody can do it alone. It’s about the schemes informing their clients and customers about new options. It’s about issuers providing the technology, easy banking apps, et cetera, to give access to it, and PSPs offering different means.
“And it’s about us as an engagement partner making this simple, enabling these kinds of technologies so they an go out fast and at a reasonable cost.” Thinking outside the box:
The German-speaking DACH region is a key focus for the Nexi Group. But it can’t realise its ambitions alone, as Nexi’s Martin Pitcock and Ratepay’s Charlotte Paauwe explain methods have now arrived and spread in these three countries, payment habits today still differ from other European countries.”
Having become one of, if not the largest European digital payments operator, Italy’s Nexi Group is advancing at pace towards a very specific target: the DACH region.
It follows the merger and integration of Nexi, Nets and Sia, three of the biggest regional players in digital payments, which created a paytech with the scale, capabilities and proximity to provide simple, fast, and safe payment solutions to consumers, SMEs, large international corporations, banks, institutions and public administrations across Europe. So what makes the three countries that together make up the DACH region such a golden egg, worthy of strategic focus?
Well, the cash-centricity of Austria, Switzerland, and Germany for one thing.
“History shows that these countries have held cash transactions for much longer and in larger quantities than the adjacent countries. They did not follow the norm when it comes to payment,” says Nexi partner marketing lead for e-commerce in DACH, Jennie Johansson Carnhamre,
“And although this development has not prevented the introduction of digital payment methods, it has inhibited speed. So although all payment
According to Charlotte Paauwe, partnership manager at white label buy now, pay later (BNPL) provider Ratepay, an independent brand within the Nexi network, it’s important that customers can quickly see what payments are accepted online – and that those payment methods are relevant to them.
“That is very region-specific,“ she says. “For example, Ratepay is very successful with buy now, pay later in the DACH region because open invoice arrangements are so important here. Focussing on what needs to be available at checkout from a regional perspective – especially if you’re an international merchant – will ultimately improve the customer lifetime value.”
Part of Nexi’s strategy therefore involves working with others locally to reveal the region’s unique traits, challenges, and attitude towards payments to ensure that the right choices are presented at the checkout, in line with the local payments culture.
So how do those cultures differ in the DACH region?
With a population of 83.8 million and a GDP of €4.121billion [2023], Germany is not only the largest of the DACH countries, it is the largest economy in Europe and the third-largest economy in the world after the United States and China.
It is a nation known for loving cash, being adverse to debt-based options, and spending too much time online.
A cost-conscious population, German people contribute to a robust domestic e-commerce market, each making several online purchases a week or month on average.
The options for payment methods are plentiful – and consumers expect to be given the choice. The long-standing favourite has been Paypal. In fact, no other country in the world uses Paypal as much as the Germans. But the latest studies of German retail habits show the first decrease in PayPal’s popularity in 10 years; from 29.6 per cent of online consumer purchases in Germany in 2022 to 27.7 per cent in 2023. Though the slide is slight, experts identify this as a turn in the tide where the popularity of other mobile options have begun to rise. And,
among those surging in popularity is BNPL, which, although still small, has doubled its market share to 3.9 per cent. Ratepay expects to capitalise on this significant shift towards cashless and instalment-based purchasing.
“BNPL has always been very dominant in the DACH region, with traditional sectors wanting it in their checkout as a white-label service to give credit to their customers because they trust their brand,” says Paauwe.” But newer business sectors have gone into it as well, like travel, drug stores, and groceries, for example.
“In essence, we are seeing a wider range of retail with smaller basket sizes being used for BNPL, which means that customers are getting used to it. This has also to do with the macroeconomics of the last two years and the decrease in purchasing power.”
under €20. But they, too, are also increasingly turning to their smartphones for cashless transactions.
This was evidenced by the results of the 2023 Austrian Visa Payment Monitor, which showed that today 61 per cent of Austrians now prefer to use digital payment methods over cash, and that, on average, 25 per cent of Austrians pull out their mobile phone or wearable to pay at the checkout – a real uptick from two years ago, when only 17 per cent did. Twenty-six per cent are even beginning to actively avoid shops that do not offer digital payments, according to Visa Europe.
When it comes to paying at point of sale, Germans still retain their strong love for cash, paying for nearly 60 per cent of all goods and services in it, according to their central bank. However, the pandemic helped increase the acceptance of cashless payments, particularly via low-cost debit cards, e-payments, and even credit cards. The central bank has also noted the increase of mobile apps to pay and exchange currencies, and is expecting to see an increase in the number of people in Germany trading their physical wallets for e-wallets.
In contrast to Germany, Austria is a tiny nation of roughly nine million people, but one with a highly developed social market economy and a GDP that makes it the fourteenth richest country.
On the whole, payment behaviours between Germany and Austria are similar, but not identical. Austrians draw on average €47billion from ATMs every year and use cash for 67 per cent of payments
The intention to help create a cashless euro payments arena is also a high priority for the Austrian Central Bank, which means that opportunities abound for companies like Nexi to support traditional banks who are inadvertently losing their slice of the payer fee pool to challengers, the Austrian e-commerce sector as a whole whose growth rate at present is less than half that of Europe, and the 15-20 per cent of shops and other businesses in Austria who are still not offering cashless solutions.
who prefer cash, and certain areas of government, including the Chancellor Karl Nehammer, are fighting to ensure that the ability to withdraw and use cash, rather than cards or digital currencies to pay, becomes enshrined in the Austrian constitution as a ‘right to cash’.
These countries have held cash transactions for much longer and in larger quantities than the adjacent countries... So, although all payment methods have now arrived, payment habits today still differ Jennie Johansson Carnhamre, Nexi
Nexi also sees a real opportunity to use the expertise it’s gained from other projects to help promote country-specific innovations, like Austria’s latest national digital ID technology, ID Austria, which was launched in December 2023.
However, it is worth noting that the adoption rate of cashless payments is a cause for concern for those in the country
“As the Austrian government seeks to digitalise its identity services to enable citizens to access a wider range of public services, we believe, based on our experience in Denmark (BankID) and Norway (MitID), that there is a real opportunity to connect ID Austria with new use cases in both the public and private sectors, such as payments and banking, mobile services, internet-based services delivered by PC, and healthcare and emergency services," says Roland Eichenauer, VP of BD, Sales & Marketing, Digital Identity & eID Solutions at Nexi. Eichenauer adds: “Looking ahead, we also believe there is work to be done to integrate ID Austria with the eIDAS wallet technologies of other markets to deliver the EU’s vision of a single digital wallet solution for all.”
Strength in numbers:
Nexi is actively building partnerships across the payments value chain in DACH
Switzerland stands as a sort of distant cousin to Austria and Germany in that its payments landscape comprises the Swiss Franc as cash, card, invoice, and mobile payments.
According to the Swiss Payment Monitor, cards are frequently used in Switzerland with the average Swiss holding at least three (compared to Austria, where consumers hold on average 1.8 per person), and credit cards are used for settlements more often than in the other DACH countries.
In terms of payment behaviour, debit cards are the most-used payment method in Switzerland both in terms of frequency of use and turnover, followed by cash in second place, and then mobile payments –in particular Twint, Switzerland’s own payment app, which accounts for 64 per cent of transactions with mobile devices and outstrips international options like Apple Pay (16 per cent) Samsung (three per cent) and Google Pay(2.1 per cent).
In distance selling, every second payment is now processed via a mobile device, which also benefits the credit card as a billing product. The frequency of mobile payment is also increasing in the face-to-face business, however, it still lags significantly behind debit, cash and credit cards.
At 53 per cent, or €5.3billion, of all
far for online payments, though is the very regional bank transfer – or Überweisung. This enduring popularity for paying from domestic bank accounts means companies with long-standing local knowledge will be instrumental for international e-commerce merchants who will need to integrate these online bank transfer payment methods in their checkout.
On this front, Nexi is also ready. In 2021 two leading payment terminal providers (CCV and Concardis) were acquired by
There is such a regional need for solutions and services, and we really want to be the payment player that is hyper-focussed on the DACH region
Martin Pitcock, Nexi Group
the group, allowing it to become a one-stop-shop for merchants and service providers in Switzerland.
The move meant it combined many years of local experience of the Swiss payments scene with a European network working along the entire payment value chain. That allows it to support Swiss merchants and service providers across national borders, thus helping them to achieve their business goals faster.
You can’t hope to cover all areas of card acceptance, card terminals and related services, cash register integration, shopping card systems, and strategising customer loyalty programmes alone. Indeed, Ratepay’s Charlotte Paauwe says its white label BNPL service could not exist without partners, be they providers of risk engines or customer support or, of course, payment service providers.
“Nexi is a fully integrated partner for us, offering our buy now, pay later, with SEPA direct debit and open invoice already integrated on their end. So it's a plug and play connection,” says Paauwe. “It makes it very easy for the merchant to quickly get payment methods online in what is a very complicated payments world with a lot of companies responsible for different parts of that value chain. There’s no way that you can do it without partnerships. A payment partner like Nexi is necessary to our success.”
Martin Pitcock, the chief marketing officer for e-commerce at Nexi Group, is particularly focussed now on building partnerships that will foster closer integration with the growing worlds of mobile payments, e-commerce, and embedded platforms in the DACH region.
“We see partnerships as critical for us to
the entire value chain of the e-commerce payment flow, from the initial conversion to shipping, fraud management or whatever else might be needed,” he says.
“There is such a regional need for solutions and services, and we want to be the payment player that is hyper-focussed on the DACH region. Therefore we are putting an emphasis on partnerships –both with customers and between great technology. As an example, we have just signed an exciting agreement with Mastercard on open banking services, and another with the largest online commerce platform WooCommerce to supercharge the DACH e-commerce market.
“Account to account (A2A) is a really exciting place in the market right now,” adds Pitcock. “With the Mastercard partnership, we are looking to bring its open banking services that were formerly called Aiia into the European markets.
“There’s been a lot of talk about A2A for many years, we’re certainly starting
to see an inflexion point now in the take-up across Europe as the network gets better and the user experience improves. People are starting to identify the use cases and to implement open banking services into their products.
“WooCommerce is another incredibly exciting partner for us. It’s one of the biggest platform partners, servicing e-commerce customers across the globe
There’s no way that you can do it without partnerships. A payment partner like Nexi is necessary to our success
Charlotte Paauwe, Ratepay
and it has a unique approach to partnership with its merchants, but also with its providers. It opens up a community that you interact with to help stimulate opportunities for growth in the e-commerce segment.”
Growth is predicated on finding solutions to some of the key concerns that many merchants have in DACH.
“For a merchant, there are a few big ticket items that really need to be addressed,” says Pitcock. “One is reducing fraud and we’re looking closely at that. Strong customer authentications has already been a big improvement and A2A payments also offer significant benefit for the customer in terms of risk and security.
“The second thing is getting merchants their money faster. The faster they can get the money into their bank account, the better cash flow they have. So we’ve sped that up dramatically by introducing day one settlement, and we’re looking now at how we can introduce day zero.
“We also have merchant cash advance, which gives a small advance on future cash flow and allows the merchant to pay it back as part of their daily turnover. It really helps customers and we’ve seen really good take-up in many countries.”
As part of its unapologetic ambition to become the leading digital payment company in Europe, Nexi Group successfully merged with payment facilitator Nets in 2021. The deal was valued at €7.8billion.
Nexi Group had itself had recently merged with the Società Interbancaria per l’Automazione (SIA) in a €15billion deal to become one of the 10 most valuable companies listed on the Milan stock exchange.
So what did the deal with Nets add into the mix? Established in 2010, Nets had enjoyed a sustained period of growth, expanding its footprint into the fast-growing payments areas of Germany, Austria, Switzerland, and Poland.
Nets acquired and partnered with a number of local brands including Concardis, Poplatek and Popla Pay, Dot Card, Przlewey 24, and CCV.
By merging with Nets, Nexi’s addressable market expanded fourfold and it gained greater exposure to the attractively fast-growing but
under-penetrated regions of Europe, including the one with German-speaking majorities (DACH).
At the time, Nexi CEO Paolo Beretoluzzo said of the merger: “We are creating a stronger Nexi... a more resilient Nexi.“
The combined entity offers Nexi’s payments services for merchants, cardholders and banks, with the
merchant-acquiring, point of sale terminals and card processing of Nets.
Today, Nexi Group is a mammoth operation generating upwards of $500million annually to its shareholders as it accelerates the growth of a cashless society both organically and through strategic mergers and acquisitions.
The next chapter in the development of e-commerce is being written by system operators, independent software vendors, design agencies and payment specialists such as Nexi, working in partnership to create the best online experience for merchants and customers. We brought together just some of them to look at how the story is unfolding in the DACH region
When Europe’s bookshops pulled down the shutters against the Covid pandemic, a new chapter was forced upon German arthouse publisher Taschen.
As 2020 began, the firm sold 80 per cent of its titles in physical stores, and 20 per cent online. By the time the disease had subsided, the split was 50-50.
Customer behaviours, changed by lockdowns that had driven a surge in e-commerce, were by now embedded. And it was clear to the business that, as a result, it desperately needed a more
capable content management system, online shop system, and more effective payment methods, says Taschen’s digital and online sales chief Gaëlle Mehanna.
“During the pandemic, we had a massive online boom,” she explains.
“We examined customer behaviour, looking at heat maps, user journeys online, drop-off points and landing page conversion rates.
“We noticed what was really important was the checkout experience. People want it to be frictionless, fast and secure. We sell books ranging in price from €15
to €50,000 and we need payment methods that cater to both ends. While credit card payments work for a €50 transaction, someone paying higher amounts wants a bank transfer, a direct debit or the ability to pay in instalments. And different markets have different preferred payment methods.”
In late 2022, Taschen decided it needed to supercharge its e-commerce development to create an integrated e-com, in-store and telephone order business, currently available in five languages.
“Our new system has allowed us to plug in Nexi’s Checkout, which means we can offer additional payment methods,” says Mehanna. Taschen quickly saw a 20 per cent lift in year-on-year revenue growth, six per higher average order value and 12 per cent uplift in total orders.
The Taschen story is one typical for established firms in the Germany, Austria and Switzerland (DACH) region where partnerships between technology providers are the solution to meeting niche customer needs. Alongside Mehanna we spoke to leaders from payment provider Nexi Group, e-commerce platform Shopware, front end web designer Makaira and digital marketing agency Brandpfeil to discuss the current payments picture.
While the adoption of e-commerce has exploded, so too has the range of payment options that can be bolted onto an online checkout – which can be to the detriment of sales success. Too much choice can baffle the shopper and complicate a web page and online checkout, says Nexi head of product success Jamal Febo. He argues that adding such complexity is like waiting in a long queue at a physical shop till, raising the same risk that shoppers will simply give up and go elsewhere.
We examined customer behaviour, looking at heat maps, user journeys online, drop-off points and landing page conversion rates. What was really important was the checkout experience
Gaëlle Mehanna, Taschen
Febo says: “Waiting is annoying for customers. If the checkout process is complex, with lots of questions being asked and too many options being made available, customers may switch from being driven by emotion and adopt a rational position. That could mean they cancel and leave the checkout.”
The assertion is backed up by research. Nexi, which bills itself as ‘The European Paytech’ due to its reach across the continent, publishes annual e-commerce reports, based on weekly surveys of European shoppers, and it repeatedly
finds that convenience is by far the number one reason consumers shop online in the first place.
To that end, Febo says online checkouts need to provide the payment options that customers want, and what is popular varies from region to region. Furthermore, an online retailer should consider how particular payments work in terms of technical integration, how fees are charged, and their accounting and log-in processes.
“In the German market, you will find that it is very fragmented in terms of payment methods and there is an oversupply of options,” Febo says. “Does a retailer need all of them? That’s a big no. Retailers should ensure they prioritise simplicity when managing payment methods. For example, we can offer several payment methods within one contract and that can simplify a client’s accounting process.”
Shopping online is for everyone Nexi’s recently published e-commerce reports for Germany and Austria reveal annual e-commerce transaction value growth of 10 per cent and 13 per cent respectively in 2023.
In both countries, 89 per cent of adults aged from 18 to 79 made web purchases each month and older people were almost as prolific online as young people – for example 92 per cent of German 18 to 29-year-olds were internet shoppers compared to 87 per cent of people aged from 65 to 79.
What people of both countries bought online was similar, too – Austria’s most popular physical-item purchases were clothes, electrical appliances and groceries, while in Germany the top three were clothes, appliances and shoes.
But, despite their shared language and culture, online payment preferences differ markedly between DACH countries, which underlines the need for a tailored approach by merchants.
In Germany, 47 per cent of people used e-wallets (PayPal is especially popular), followed by invoice (37 per cent), credit cards (26 per cent), direct debit (25 per cent), bank transfer (19 per cent), debit card (13 per cent), mobile payment wallets (11 per cent) and instalments (nine per cent).
In Austria, credit cards were king, at 40 per cent, followed by invoice (35 per cent), e-wallets (33 per cent), bank transfer (27 per cent), debit card (21 per cent), direct debit (18 per cent), mobile payment wallet (11 per cent) and instalments six per cent.
Nexi’s 2022 report for Switzerland shows in that year 60 per cent of online transactions involved a credit card, followed by invoices at 42 per cent and e-wallets at 29 per cent.
Looking further afield in Europe, mobile payment options are popular in Nordic countries, while Croatians favour credit and debit cards and the Greeks still cling to cash. Such complexity across the European Economic Area means partnerships between software providers are vital to give the necessary breadth in payment solutions for merchants selling in more than one country.
The German market is very fragmented in terms of payment methods and there is an oversupply of options. Does a retailer need all of them? That’s a big no Jamal Febo, Nexi
On its website, Nexi makes it plain that it aims to join forces with ‘e-commerce and digital agencies, shop system providers, developers or associations’ to grow revenue from its payment solutions.
The firm works closely with German e-commerce platform provider
Shopware, for example, which differentiates itself by being open and not mandating what payment systems its merchants select.
Shopware’s EMEA general manager Alexey Pronin says Nexi’s presence in multiple geographies allows his business to be a ‘one-stop shop’ for merchants that want to grow beyond the DACH region.
“E-commerce is not new anymore and businesses clearly need to differentiate themselves,” he explains.
“Germany is a developed market and what we see among our customer base is that many of them are looking to expand into new areas.“
“This is why at Shopware we are also expanding internationally as a business, which makes it important to identify partners such as Nexi in the payment space.
“Partnerships are definitely the multiplier of success and speed when it comes to entering new markets. In the modern e-commerce world, you cannot be a one-stop shop, producing all the solutions your merchants need on your own.
“You need to collaborate with other parties that are niche and experts in a particular dimension. Being open to partnerships is one of our core principles and we have more than 1,600 in different geographies and categories.”
Shopware, based in the German town of Schoppingen, near the Dutch border, provides open-source tools and powers online shopping for around 100,000 mid-sized and large businesses – many of them established firms that have had to navigate a switch to digital sales.
Partnerships are definitely the multiplier
It is particularly focussed on the mid-market segment which, it argues, is ripe for development since many of its e-commerce platform rivals have moved upmarket to develop enterprise-class solutions for big firms. Meanwhile, platforms such as Shopify cater for new shops and small businesses.
Alongside continued growth in B2C retail, Pronin says it’s witnessing a strong growth in online B2B commerce and the development of digital systems to make dealmaking more efficient – such as digital sales rooms.
A digital sales room is a secure online location where sales reps and buyers can converse and access the content they need to trade. They are typically organised into microsites and provide access to the technical information needed by buyers, plus access to stakeholders via communication systems.
Pronin says: “The digital sales room means B2B sellers don’t have to travel so regularly to visit customers. It can be done online and, as a result, the sales cycle is run
in the most efficient way. Payments is playing a substantial role in the development of sales rooms. Enabling this shift in B2B towards greater efficiency is an important angle for us and providing modern payment technologies is part of it.”
The Shopware e-commerce platform is ‘headless’ – i.e. the front and back ends are decoupled so one can run without the other. That also means a merchant could specify a Shopware back end with, for instance, a front-end shop designed by a specialist provider such as Mannheim-based Makaira, then plug in a payments system powered by Nexi.
Publisher Taschen specified a Makaira customer management system during its recent web shop revamp.
Makaira business development manager Lars Denzer echoes Febo’s assertion that the payment options provided by merchants must suit what is popular in a particular country. And he stresses the need for speed.
An online shop needs a lot of performance – the first page should load in less than one second, ideally within 0.6 of a second
Lars Denzer, Makaira
“An online shop needs a lot of performance – the first page should load in less than one second, ideally within 0.6 of a second,” he says. “A title page must stand out, and products listed within subpages should be well described and logically organised.
“It’s good to include high-quality pictures, clearly display availability, price, delivery times and provide information about payment methods.”
Moving onto the checkout experience, Denzer underlines the growing importance of so-called turbo checkouts used by e-commerce giants such as Amazon and eBay, which facilitate one-click purchases.
He says: “Because of the integration of Nexi into our system at Makaira, our sellers can use the Nexi turbo checkout. The checkout can be offered directly below the product on the page. Obviously, it’s fast, the customer is done in one click and it increases conversion rates.”
Jan Meissner of Hamburg online marketing agency Brandpfeil says that once a customer has reached the payment stage, the biggest part of their online journey should be over and a site must provide a ‘technically faultless, high-performance solution which will not lead to a payment cancellation caused by technical issues’.
He explains: “Payment methods should be matched to the customer with the necessary support provided. It should be our job as a marketing agency to stay abreast of development by payment providers so we can always offer advice that is up to date.”
Denzer adds that during his 26-year career in e-commerce he has witnessed major changes each decade, and the most recent seismic shift has centred around social media.
He says: “At first we had online shop software, then marketplaces, then search engine optimisation and search engine advertising – technically, everything was built on the previous innovation.
“In the last two to three years, though, sellers have been able to start from the ground up and strongly establish themselves using social media. Instagram and TikTok are tools that can provide significant reach for sellers but many
Jan Meissner, Brandpfeil
bigger retailers have not understood this –smaller and newer retailers are more familiar with the medium.”
Returning to Mehanna at Taschen, the bookseller knows it must evolve its digital services to meet customer expectations.
“As publishers, it’s important that customers have a tactile experience with a book, which we can’t offer them online,” she explains. “But we can offer them content that makes them feel close to the book. Meanwhile, the key to our checkout is making it as fast as possible. With the rise of Apple Pay, PayPal Express, Google Pay, it’s really become about one-click payments.
“Also we must recognise that different markets have different preferred payment methods. We must learn about these different behaviours and make sure we have the right payment methods to offer.”
