Interview • 19.06.2015

"Consumer willingness to make cashless payments needs to increase"

Interview with Dr. Markus Weber, Managing Director of Ingenico Payment Services

Dr. Markus Weber: Thanks to the improved technical possibilities, the wiggle...
Dr. Markus Weber: "Thanks to the improved technical possibilities, the wiggle room for new services continuously increases."
Source: Ingenico Payment Services
Within the scope of the Regulation of the European Parliament, the payments market will continue to change. Given dwindling margins, only larger payment service providers will be able to afford the continued integration of new payment methods and payment services. We spoke with payment expert Dr. Markus Weber, Managing Director of Ingenico Payment Services, about the specific impact of the Regulation and its effect on the innovative capacity of the industry sector. 

Dr. Weber, there is currently a lot of heated debate in the industry about the EU Regulation. Can you briefly explain what it specifically contains and how the Regulation will affect retail in your opinion? 

The design of the national implementation of the EU Regulation is of utmost importance for the industry. The pricing model will influence the acceptance and future of credit card and mobile payment options. On the one hand, fees are drastically capped and the profit incentives for new market participants will decrease. On the other hand, the Regulation will make card-based payment options more attractive to retailers, especially when compared to cash payments. It is expected that more retailers will offer card-based payment options in the future since their costs will be lowered sustainably. 

The public debate is fueled by the percentage cap in the fee structure (0.2 percent for debit and 0.3 percent for credit cards). This so-called interchange fee is just one component of the total charges retailers need to pay for the international payment methods (e.g., Visa or MasterCard). In addition, retailers need to pay fees to the credit card organizations (“scheme fees” e.g., to Visa or MasterCard) as well as a fee to their own payment services provider, the so-called acquirer. The fees to the credit card organizations and the acquirer are not a part of to the EU Regulation and are therefore not subject to any regulation. 

Currently there is a heated debate as to what extent national payment methods in Germany, the EC cash method with the Girocard (debit card) as well as electronic direct debits are included in the Regulation. These very common and cost-effective methods for retailers do not exhibit varying cost components and were so far charged a standard percentage fee of the purchasing price, for instance, 0.3 percent in the case of the Girocard. Previously, there was a fixed lower price limit to ensure that payment service providers are still able to break even given even very small purchasing amounts. In the case of the Girocard, that’s 8 cents per transaction. 

With the upcoming national implementation of the EU interchange fee regulation, the German legislator under the auspices of the German Federal Ministry of Finance needs to decide on fee caps for Girocard and ELV. Here it is strongly suggested to take the different price structures of national and international payment methods into account. 

What are the distinct features of the national German payment methods? 

Germany continues to be a country where most people like to pay with cash. It is not sufficient if retailers simply provide more card-based payment methods in the future or expand the mobile payment options. Consumer willingness to make cashless payments needs to increase. The way to success is primarily paved through a simple and intuitive design of payment methods (convenience) and a certain “coolness factor".

The “war on cash” will continue and a higher level of acceptance for...
The “war on cash” will continue and a higher level of acceptance for card-based payments can be expected in the long run.
Source: / Arne Trautmann
What negative impacts could there be for German retailers? 

One risk with the national implementation of the EU Regulation on Interchange Fees for Card-Based Payment Transactions could be that in the debate the regulated final price for retailers for Girocard and ELV is being equated with the regulated interchange fees for international payment methods, even though the latter only make up a portion of fees paid by retailers. 

If - spurred on by cost reduction requests of German retailers- the fees for Girocard and ELV are now being lowered to a level that no longer covers costs, the existence of these payment methods comes into question. And without the competition of national payment methods, the door is wide open for possible fee increases in the non-regulated scheme fees of Visa and MasterCard. 

In your point of view, what effects will the Regulation have on the percentage of card-based and cash payments? 

The willingness of consumers to pay with credit cards depends- among other things- on whether and how much fees they will be charged for their cards (whether you need to pay an annual fee for instance). This is where the Regulation comes into play. Thanks to the scheduled cap on interchange fees, credit card issuing banks lose a significant source of revenue. The big question now becomes how they compensate for these losses in the future. 

I don’t assume that issuers will pass their losses entirely on to the consumer by increasing fees for example. After all, there is also competition amongst card issuing banks. The “war on cash” will, therefore, continue and a higher level of acceptance for card-based payments can be expected in the long run. 

Mobile payments are also becoming increasingly popular in Germany. How does the current trend influence such innovations in payment methods? 

The Regulation will significantly alter the playing field amongst payment service providers and therefore indirectly influence the mobile payment sector. In light of the dwindling distribution margins in the value chain thanks to the Regulation, new providers like Apple Pay or Android Pay and all other mobile payment methods need to provide a benefit to retailers and users to make money in other areas. This is why they develop products in the areas of convenience, customer acquisition and customer loyalty. Unlike mere payment transactions, these products yield more attractive profit margins in the long term. 

Thanks to the improved technical possibilities, the wiggle room for new services continuously increases. The financial technology companies of the world all benefit greatly from payment methods as the core product. Yet with all the excitement about technology, we must not forget one thing: ultimately, it’s the consumer who needs to accept these things. This applies to both the mobile payment sector as well as card-based payments. The user experience is the key element. There are many new ideas in the making because they are technically feasible, but they do not hit the convenience mark with the mass market. In the future, this will be a much bigger challenge than the Regulation. 

Interview by Daniel Stöter,

related articles:

popular articles:

Thumbnail-Photo: Self-Service for the ultimate customer experience...
19.02.2020   #brick and mortar retail #self-checkout systems

Self-Service for the ultimate customer experience

EuroShop 2020: iXtenso spoke with Diebold Nixdorf

Diebold Nixdorf as a leader in connected commerce offers innovative technologies for the optimized mix of self-service and checkout systems. With the program Storerevolution™ their solutions are a benefit for customers and retailers at the ...

Thumbnail-Photo: Think Different! Thought leadership at ISE 2020...
13.12.2019   #security #digital marketing

Think Different! Thought leadership at ISE 2020

Over 200 specialists to offer expert opinion and insight

Integrated Systems Europe 2020’s professional development programme will feature over 200 leading experts from a wide variety of disciplines and subject areas across five days of keynotes, conferences, masterclasses, workshops and ...

Thumbnail-Photo: Solid Lines 2020, a product range …
01.02.2020   #refrigeration cabinets #Trade fair special EuroShop 2020

Solid Lines 2020, a product range …

… designed with the idea of generating unforgettable shopping experiences

New architectural and design concepts are appearing in the conceptualization of current supermarkets, especially aimed at improving the customers' shopping experience by incorporating solutions that generate value, allowing to optimize energy ...

Thumbnail-Photo: Self-service for faster checkout
01.01.2020   #epos systems #brick and mortar retail

Self-service for faster checkout

“Moments that Inspire”: Toshiba shows at EuroShop stationary as well as mobile solutions

In the future, there will be the Frictionless Store – no scanning, no hassle for the consumers. But consumers do not want to wait until this can become reality everywhere. The payment process should already be fast and convenient today.At ...

Thumbnail-Photo: Smart digital labels and pricing automation
07.02.2020   #displays #electronic shelf labels (ESL)

Smart digital labels and pricing automation

SES-imagotag at EuroShop 2020

For 25 years, SES-imagotag has been the trusted partner of retailers for in-store digital technology. SES-imagotag, the worldwide leader in smart digital labels and pricing automation, has developed a comprehensive IoT and digital platform that ...

Thumbnail-Photo: Cloud access control for retail companies
27.01.2020   #security #security management

Cloud access control for retail companies

SALTO KS Keys as a Service: Manage access wire-free and in real-time

With SALTO KS Keys as a Service, all types of wholesalers and retailers, chain restaurants and banks can manage access to all shops, locations, offices and warehouses/storage rooms wire-free and in real-time. This enhances loss prevention, helps to ...

Thumbnail-Photo: Digital tool helps MENY in the fight against food waste...
13.02.2020   #sustainability #app

Digital tool helps MENY in the fight against food waste

Printing discount labels directly from the app

After a convincing test, Dagrofa rolls out the food waste app ‘Whywaste’ in all the Danish MENY stores. At MENY in Solrød, the store has already managed to achieve a significant reduction in food waste. In addition to the app, the ...

Thumbnail-Photo: Unit development with R290
11.12.2019   #refrigeration cabinets #Trade fair special EuroShop 2020

Unit development with R290

Frost-trol develops a pilot water condensation project using R290 as a refrigerant

Since 2005, Frost-trol R&D efforts have focused on developing efficient cabinets and finding solutions with natural fluids: R744, R290 or R1270. Propane (R290) has always been at the center of attention of our research line, because it is ...

Thumbnail-Photo: A strong team for the POS
18.12.2019   #pos systems #pos software

A strong team for the POS

Founding of neoalto GmbH

POS TUNING, the specialist for the optimized presentation of products at the point of sale, announces the spin-off of the digital services division. The GmbH (LLC), founded in September as neoalto, has already made a name for itself on the market ...

Thumbnail-Photo: Epta on the podium of the German Design Awards 2020...
10.12.2019   #design #refrigeration cabinets

Epta on the podium of the German Design Awards 2020

Excellent prodcut design with OutFit and Mozaïk, combining functionality and aesthetics

Epta wins the prestigious German Design Award for the second time, the award given to projects that merge functionality and utility, aesthetics and quality. The OutFit family under the Costan brand and Mozaïk under the Bonnet Névé ...


Flinger Broich 203
40235 Düsseldorf
Saint Gobain Sovis
Avenue de la Republique
2407 Chateau Thierry Cedex
05-830 Nadarzyn
Delfi Technologies GmbH
Delfi Technologies GmbH
Landgraben 75
24232 Schönkirchen
APG Cash Drawer
APG Cash Drawer
4 The Drove
BN9 0LA Newhaven
Via Venezia, 58
35010 Marsango di Campo San Martino/PD
Isafjordsgatan 5
164 40 Kista
GLORY Global Solutions (Germany) GmbH
GLORY Global Solutions (Germany) GmbH
Thomas-Edison-Platz 1
63263 Neu-Isenburg
ROQQIO Commerce Solutions GmbH
ROQQIO Commerce Solutions GmbH
Harburger Schloßstraße 28
21079 Hamburg