10th easycash SEPA Round Table Innovation depends on Pioneers

EuroCIS, Germany, Duesseldorf, March 2010. Experts from the sectors of trade and credit services met for the tenth time on the invitation of easycash Holding GmbH to discuss SEPA and its related challenges. Mr. Andreas Pratz, AT Kearney partner, and head of the business unit Payment Practice in Europe, spoke at the Hotel Villa Rothschild near Frankfurt about the future of the card payment market. His presentation entitled ‘A colourful world of payments: which is the card of the future?’ was followed by lively as well as interesting discussions among the participants.
Future means Innovation
“The question is not only which card concept to use”, Andreas Pratz emphasised in his introduction. “Instead, we must ask ourselves: how can I increase and enhance my business?” The payment expert sees enormous potential in particular for the segments of low value payments – after all, in Germany alone, every second payment transaction can be categorised as low value. Pratz illustrated the willingness of users to experiment with non-cash payment options with the example of the mobile wallet solution offered by Japanese mobile phone provider NTT Docomo. The problem appears to lie in the silo mentality on the part of issuers and the market itself. The same applies for e.g. contactless payment at the POS, for example with a cash card. “Here in Germany, we’re facing the ‘chicken and egg’ problem”, commented Steffen Kowalski, Regional Director for Transaction Banking with WestLB: “Banks fear additional costs in regards to issuing cards with additional features for contactless payments for example, if the trade sector is unwilling to invest in terminals. The trade sector on the other hand, has no valid ‘business case’, unless banks begin issuing a critical mass of cards with the relevant features. The only way forward is a concerted effort on both sides.”
Andreas Patz also elaborated on the issue of prohibitive costs in the German market. High interchange and terminal usage fees are a particular problem for the low value segment and its low margins. “With increasing internationalisation, these kinds of pricing discussions will however become less important”, added the AT Kearney expert.
In terms of card concepts, Pratz foresees a cross-border market consolidation and a move away from traditional concepts. According to another core thesis in Pratz’s presentation, these types of payment transactions will remain in the domain of payment providers, who offer one-stop-solutions: “The trade sector will continue to concentrate on its core business and on the optimisation of the purchasing process. Innovations will remain the responsibility of the banking sector, and trade will continue to demand them.”
“Card products with new payment functions will in future be introduced to the market by other providers as well”, summed up Marcus W. Mosen, Managing Director of easycash Holding GmbH and host of the SEPA Round Table in his closing words. “And this will put them in direct competition with traditional and established providers in the market for payment cards.”
The 11th SEPA Round Table will be held on May 3, 2010 in Cologne.