The payments sector is undergoing constant change – and not just since the outbreak of the Corona pandemic. I talked to Günther Froschermeier, co-founder of CCV GmbH, about some current trends.
COVID-19 is considered a major driver of digitalisation in general and contactless payment in particular. The payment sector in general is currently undergoing numerous changes. The payment terminal must increasingly become an all-rounder. Until now, this has meant accepting all common payment cards, including mobile payment (Google Pay, Apple Pay) and also being able to process special forms such as bonus systems or gift cards.
The increasing demands for mobility in retail and the service sector as well as the need to save on investments must be taken up by payment service providers in terms of functionality and flexibility of new developments. For example, the mobile operating system Android is increasingly gaining attention as an individualiser of static payment terminals. And on the side of payment procedures, a possible new star is rising with “Request to Pay”.
Interview with Günther Froschermeier, CCV GmbH
I talked to Günther Froschermeier about some of the current trends and developments. He is a founding member of CCV GmbH (formerly EL-ME) and has been driving the development department of the payment service provider as CTO since 1994. With a flair for innovation and the right assessment of technological innovations, he stands for the comprehensively positioned solution portfolio of CCV, which is one of the first payment companies in Germany to rely on Android as the new operating system for payment terminals.
Omnichannel as a term is almost worn out
Der Bank Blog: Omnichannel is still considered one of the most important topics or strategies in retail. To what extent do you implement this from a payment perspective?
Günther Froschermeier: Omnichannel as a term is almost worn out by now. However, retailers who do not deal with it now at the latest will be increasingly left behind when it comes to “Click & Collect” or “Call & Collect”. The online component within omnichannel is essential; at the latest during the lockdowns, retailers already active in e-commerce were able to profit from it.
As a payment service provider, we enable the seamless linking of all transactions and back-end processes from all channels, online, offline and also mobile. We have further optimised this merging of online and offline via APIs (Application Programming Interfaces) and a strong software platform. For our customers, we are creating a point-of-sale (POS) ecosystem that is truly borderless and comprehensive: both in terms of internationality and in terms of the mix of online and offline processes.
Android is an important trend for payments
Der Bank Blog: What innovations do you currently see on the technology side in payments?
Günther Froschermeier: The generic term is clearly “Android”. Android as an operating system makes it possible for the first time to connect modern business apps with the security-relevant payment processes on a terminal. This gives the merchant access to a multitude of business cases with a single device, which previously could only be developed separately or were realised by linking mobile terminals with, for example, Android tablets. The payment terminal thus becomes an individual working device at the POS and in all mobile areas of application.
But Android offers much more than that: the installation of so-called tap-to-phone apps upgrades a commercially available smartphone to a card terminal. Only recently, we were able to achieve certification by the German Banking Industry as a Digital TOPP for the processing of the Girocard contactless for our own solution CCV PhonePOS. Contactless payment with Mastercard and VISA has already been possible for some time.
Mobile payment meets with more and more acceptance
Der Bank Blog: Where and with which target group could such a payment option establish itself?
Günther Froschermeier: Basically, the focus is initially more on the small merchant who has so far shied away from the acquisition of a payment terminal. But this kind of digitalisation also opens up new possibilities in the project business, for example in the area of service personnel or logistics service providers. The equipment with a tablet or smartphone is often obligatory in these areas. By installing a payment app, no further POS hardware is necessary and payment is made directly on site.
Mobile payment is meeting with more and more acceptance: this can be attributed equally to the advertising measures during the Corona pandemic by merchants and banks.
Der Bank Blog: Even though apps play a big role as technology with Android as the operating system – the classic payment process itself is not changing. What does the future look like on this side?
Günther Froschermeier: This is the big question of “what comes after contactless?”: Face ID as identification is already used – for two-factor authentication this is extremely helpful. With the use of contactless technologies, the “stumbling block” of the contact-based card reader and magnetic stripe reader has now also been increasingly eliminated.
Many possibilities are in the starting blocks and will further develop the market. In particular, the variety of supported payment methods has increased enormously in recent years. It will be exciting to see when and how the big players like Facebook, WhatsApp or even Google change payment transactions in the future. And why shouldn’t Tesla or other OAMs also enter this business – the possibility of fully automatic payment via IOT, for example tolls or parking, is already on the rise.
Request to Pay is an important new trend
Der Bank Blog: Which new payment methods do you currently see as promising?
Günther Froschermeier: Instant payment has lost its intensity, many good initiatives have not been a resounding success so far. Currently, “Request to Pay” (RTP) is considered a new, much-noted payment procedure that is to start in Europe in June 2021. With this type of payment, the customer receives a message with all the information about the transaction, which prompts him to pay. The customer must then actively confirm the payment. The recipient can automatically assign the payment to the underlying transaction via invoice references.
This principle is not only to be used in e-commerce, but also at the point of sale, i.e. in local shops. In this case, the payment request lands on the smartphone and can be confirmed there directly with a fingerprint or PIN. While this is already used in some countries, it is actually new for the SEPA area and could be readily adopted by merchants with many direct debit procedures or invoices.
Der Bank Blog: Thank you very much for the interview.
About the author
Dr Hansjörg Leichsenring is the editor of “Der Bank Blog” and has been professionally associated with the financial sector for over 30 years. After completing his banking apprenticeship and studies, he worked in various positions, including as a director at Deutsche Bank, as a board member of a savings bank and as the managing director of an online broker. As an expert on strategies in the areas of digitalisation, innovation and sales, he is a sought-after speaker and moderator at internal and external events at home and abroad.