Introduction into Online and Mobile Payments - Presented by IXOPAY and aye4fin
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Introduction into
Online and Mobile
Payments
Presented by IXOPAY and aye4fin 08 September 2020
Agenda
Introduction
• What even are online payments and why should they matter to me?
• How did Visa and Mastercard develop a multi-billion-dollar business
with Zero risk?
Insights into new payment initiatives
• What are banks doing and what is a ‘super app’?
• Do you trust Facebook and What’s App to handle your money?
Why Adyen made it and Wirecard did not
• Are Adyen and Wirecard just two peas in a pod?
• How did Wirecard become the Icarus of the payments industry?
Intro to Online and Mobile Payments 2Introduction
The evolution of payments: From true P2P to schemes
Forecast
What is next for
Disruption payments and who will
New technologies and be the new players?
Advancement capabilities shake up
Schemes enable established network
Standardization advanced business
Same products, new models
Stone Age
(global) standards
First real person to
Guarantees
person payment
Key mechanisms trust
Intro to Online and Mobile Payments 3Introduction
Trust and guarantee: The stone age of payments since beginning of all times
P2P = Shell 4-Party Banking Infrastructure
Buyer Bank Seller Bank
Buyer Seller
Buyer Seller
• Shell payments were used in many regions worldwide • Introduction of cheques and bank accounts to enable
and are still in use today more advanced business models
• First real person to person payment • B2B, B2P, B2G, and other models were introduced
• Key mechanism trust is still the base of all businesses • Guarantees are the foundation of any and all financial
today services
Intro to Online and Mobile Payments 4Introduction
Different approaches by leading companies: Advancements through new technical capabilities
3-Party Scheme 4-Party Scheme
Card Scheme Card Scheme
Issuer Acquirer
OR Issuer Acquirer
Buyer Seller Buyer Seller
• Scheme focuses on promoting and securing brand
• Scheme manages brand and all operational aspects
• Operations will be executed by license partners (Issuer
• Scheme remains owner of all business aspects
and Acquirer)
• Scheme has full credit risk
• Scheme has zero credit risk
Intro to Online and Mobile Payments 5Introduction
Domination of the customer’s daily life: Disruption in established networks lead to 5-Party
Schemes
Apple Pay Bluecode
Card Scheme Settlement Bank
Issuer Acquirer Issuer Acquirer
Buyer Seller Buyer App Seller
Provider
• Focus on direct customer access
• Private mobile payment scheme
• Issuer and card schemes need to pay for access to
• Introducing app provider as new party into the scheme
customers
• European initiative to innovate payments
• Zero credit risk for Apple Pay
Intro to Online and Mobile Payments 6Introduction
It started with Shells, but only Apple and Google offered innovation in the past 50 years of
payment
Key findings
PayPal is threatened by local APMs, Visa/MC are challenged by
Even existing market leaders are
Apple Pay and Facebook and banks are challenged by new market
challenged by new initiatives
entrants
Existing business models will also provide
3 and 4 corner business models still build the core of all applications
the core of future business models
The one who dominates the customer‘s Apple Pay, Google Pay, WeChat, Facebook and WhatsApp are
daily life, will determine how payments dominating the daily life of billions of people making them
will be done gate keepers for acceptance of payment systems
Let’s look at some of the new payment initiatives!
Intro to Online and Mobile Payments 7Insights into new payment initiatives
The market leaders: Rolling out services globally while expanding services in geographic and
vertical directions
• Launched in 2014 • It is not a separate payment method, but a wallet service
• 50+ countries supported in 2020 encrypting card data
• Handles more than 5% of global card • All transactions processed are recognized as card
transactions transactions not Apple Pay
Estimated number of users worldwide (in millions) The secret of success
2018 2020 227 “We have to make things intuitively obvious“
– Steve Jobs
100
51
100
140
109 107 + •
•
•
Super easy onboarding
Super Intuitive use
Global reach
39 • Consistent functionality
Google Pay Samsung Pay Apple Pay girocards in
Germany
Source: Juniper Research & Statista
Intro to Online and Mobile Payments 8Insights into new payment initiatives
Underrated alternative: Super app Grab captures Southeast Asia and will prepare for further
regions to conquer
• 77% of transactions via Grab Pay
• Launched in 2012 as taxi service
• $ 1bn annual revenue run rate
• 187 million users, valuated at $ 15bn
• 53 million merchants support Grab Pay, with minimum
• Available in 8 Southeast Asian countries
100k joining each month
Which of the following partners would you love to process Full-service in one app
payments with?
Transportat Wallets Videos Daily Games Recommen
ion Deals ded Food
Food Scooters Hotels Split Bills Destinati Traffic
ons
Source: Payment-Audit.com via LinkedIn
The payments feature on WhatsApp is not available in Express Groceries Rewards News Ads Financial
this country Services
Intro to Online and Mobile Payments 9Insights into new payment initiatives
Digital Currencies are repeating the evolution of payments within few years
First DLT-products: Bitcoin = P2P Digital currency issued by central banks
Buyer Bank Seller Bank
€
Buyer Seller
Buyer Seller
• Bitcoins are used for anonymous P2P payments • Digital currencies replace existing means of payments
• Issuing and management of values is unregulated • Issuing and management of currencies is regulated
• Key mechanism trust is still the base of all businesses • Several initiatives are on ist way globally with China
today being the most advanced
Intro to Online and Mobile Payments 10Insights into new payment initiatives
European Banks: Avoiding the crush between digital market leaders and innovative market
entrants
EPI • Pan European payment scheme
European Payment • Provide multichannel solutions
Initiative • Reduce dependencies from US and CN
SCT INST • EPC Payment scheme • Ambitions address relevant
SEPA Instant Credit • Started in 2017 needs
Transfer • Available across Europe • Execution does not address
market needs
• Market relies on leaders and
• Add. communication layer
RTP innovative products
• Enabling additional services
Request to Pay
• Scheme rules by end of 2020 • Exception: few national
initiatives, e.g. iDEAL
• Initiative of German Banks
#DK
• Merge existing services (paydirekt, giropay,
Deutsche
kwitt)
Kreditwirtschaft
• Focus on reach in Germany
Intro to Online and Mobile Payments 11Why Adyen made it and Wirecard did not
The adyen story: Clear focus combined with long term strategy
= 'start again'
Success Criteria Growth Future Scenarios
• Experience from bibit • Pilot merchant Groupon pushed 1. Global scale merchant acquisition
• Team with shared history global growth 2. Vertical expansion into financial
• Brand-new inhouse technology • Focus on WC tech startups supply chain
• Omni-channel solutions • Offering for all sales channels 3. M&A activities to increase market
• Grown value chain with acquiring share
• Target multinational merchants
licenses in several countries
Intro to Online and Mobile Payments 12Why Adyen made it and Wirecard did not
The wirecard story: Ambitious growth combined with M&A activities
digital platform for
financial commerce
Success Criteria Growth Future Scenarios
• Experience from ventures • Numerous acquisitions 1. Mini-wirecard in highly
• Team desire for high margins • Offerings for all sales channels competitive market
• Mediocre technology • Grow value chain with bank and 2. Disappear due to sale of assets
• Online merchant acquisition acquiring license 3. Valuable assets build nucleus for
• Operate local subsidiaries new payment champion
• Underserved merchants
Intro to Online and Mobile Payments 13Why Adyen made it and Wirecard did not
Similar offerings and aggressive sales: Considering major differences
Growth strategy Organic M&A
Sales focus Multinational merchants High margin
• Both companies have teams of
Technology Inhouse Mix of many platforms very capable and smart people
• The company with focus on
inhouse tech managed to succed
Geographic focus EU, US and ROW EU and ROW (no US) against the M&A and high margin
driven competitor
Payment experience High Mediocre
Risk appetite Low Mediocre and more
Intro to Online and Mobile Payments 14What does all of this mean for the future of payments?
Payment is sexy Always have a backup plan
Mobile Payment Companies relying on
NFC single source strategies
Invisible Payment face severe risks when the
Contactless Commerce selected partner will go out
Super Wallets of business even for a small
time
All these iniatives and many
more will be relevant for us in
the future and offer fun and “Also DAX-companies can
massive opportunities for fail”
user, merchants and
providers
Intro to Online and Mobile Payments 15Your Host
Thomas Tittelbach: Managing Partner of aye4fin GmbH
Profile
• International Payment und eCommerce expert with more than 20 years of industry
experience
• Signigicant leadership experience in the implementation and operation of digitalisation
projects
• In-depth knowledge of business strategy, product development, project / product
management and operation
Thomas Tittelbach
Managing Partner
Experience
• Since 2016: CEO and Founder of aye4fin
aye4fin GmbH • 2010 – 2015: CEO and Co-Founder of Omba and PAYRETO
• 2008 – 2010: Head of Payment Systems at ClickandBuy
Im Mediapark 5 • 2000 – 2008: Director of Business Operations at asknet AG
50670 Köln
P: +49 (0) 221 975 867 21
M: +49 (0) 160 689 015 1 Education
E: thomas.tittelbach@aye4fin.com • Industrial Engineering studies at the Nottingham Trend University (UK)
Web: www.aye4fin.com • Business Engineering studies at the University of Applied Sciences Karlsruhe (DE)
Web: www.payment-audit.com • Numerous publications, conferences, articles, and speaking committments
Intro to Online and Mobile Payments 16THANK YOU! Should you have any questions, please feel free to contact us. Address aye4fin GmbH Im Mediapark 5 50670 Cologne, Germany Email info@aye4fin.com Telephone +49 (0) 221 97586721 Websites www.aye4fin.com www.payment-audit.com Intro to Online and Mobile Payments 17
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