Why it is difficult to compare the German Mobile Payment Landscape with the U.S.
The first time I came in contact and worked within the mobile payment industry in Germany was in spring 2014. Together with a friend of mine I freelanced and promoted a mobile payment application called kesh in Düsseldorf and the surroundings. Later that year I started a 1,5-year long internship at the XCOM AG and the biw AG – which are both now part of the Fintech Group AG – where I was working solely on the German mobile payment application “kesh”.
I never really thought about mobile payment before I came in contact with this job. Sure, every time I had to pay something online I used PayPal. But using PayPal or another app to send friends or merchants money was – especially in 2014 – far fetched. But as I learned about the advantages of mobile payment I learned to love it.
Market Gap: U.S versus Germany
I learned about the competition in the United States – not only as part of the job but because of my own curiosity. I was surprised about the many possibilities you had (already) in 2014 to pay by using your mobile phone. While I was lucky when one or two other friends were using kesh (who by the way both worked for the company). On the other side of the Atlantic Venmo and Apple Pay already showed millions of active users. Already in 2014, the gap between U.S. the U.S. mobile payment market and the German one was tremendous.
Since 2014 this gap widened even further. Snapchat and Facebook introduced payment functionalities into their messengers. Today you are able to pay businesses by using your Facebook Messenger. Samsung Pay and Android Pay launched in the U.S. market. And businesses adopted these new technologies fast.
The German mobile payment market hasn’t shown any real progress since 2014. While there are some mobile carriers who try to get into the mobile payment industry – the solutions they present are laughable. The biggest milestone was when ALDI introduced contactless payments in all their stores around one or two years ago. The innovation coming from German banks and mobile payment startups is non-existent. Mobile payment products from Germany are – so far – doomed to fail.
The Issue with Mobile Payment Acceptance Statistics
Instead of coming up with a really innovative, well managed, bank-independent mobile payment solution with an amazing user experience – the ones most responsible usually use statistics and surveys showing the market acceptance of mobile payment in Germany versus the U.S.
The numbers are clear. People in the United States are more open to mobile payment than people in Germany. The fact is that these kind of surveys and statistics are useless. You cannot compare people from the United States with people from Germany when it comes to mobile payment.
In the U.S. you can pay at every corner with Apple Pay, Samsung Pay, and Android Pay. Venmo – which you can use to split bills or simply send money to your friends – has hundreds of millions of users. Snapchat and Facebook implemented P2P payments into their messengers. There are even a few shops which started to accept Bitcoin and Ethereum payments.
People from the U.S. are a hundred times for aware of mobile payment than people in Germany. They have several market-ready mobile payment solutions with amazing user experience. Their phones come with ready-to-use mobile payment capabilities – namely Apple Pay, Samsung Pay, and Android Pay. Not one of them is available in Germany. In Germany, there is not a single well-known mobile payment application.
So does it really make sense to ask 1.000 people in the United States on their opinions about mobile payment and compare them with 1.000 people from Germany who have never used or heard of mobile payment in their life? No.
Instead of looking at wrong numbers German banks and startups need to start innovating. In small startup teams and completely (100%) independent from large banks or other financial institutions. What about a decentralized blockchain based mobile payment application?