Payment Network AG was founded in 2005 and is headquartered in Gauting near Munich. The company has subsidiaries in Hürth/Cologne and Wetzlar/ Frankfurt. With sofortbanking (sofortüberweisung) the main product of Payment Network, you can buy at more than 20,000 online shops. Pay for your goods and services using your own online bank account. All you need is to have your online banking details to hand. sofortbanking is available in Germany, UK, Netherlands, Belgium, Switzerland, Austria and Italia. All products of payment Network AG are based on the idea of online banking. Almost everyone with an online banking can use the SOFORT products to securely and quickly pay on the internet or let verify his identity. All products are monitored and certified by the TÜV Saarland.
The Paypers has had the chance to talk with Georg Schardt (CMO) about the key features of the company’s sofortbanking online banking-based payment option. In parallel, The Paypers has conducted an interview with online retailer notebookbilliger.de to reveal the main reasons which prompted the merchant to implement sofortbanking.
Georg Schardt is Chief Marketing Officer at Payment Network AG. He has more than 25 years of experience in the European mail-order and retail business. Before joining Payment Network AG, he worked on the management board of the online retailer Conrad Electronic where he was responsible for the online and mail-order distribution channel.
How does sofortbanking, the direct payment offering of Payment Network, work?
Georg Schardt: It´s a very simple idea. The consumer initiates a payment after purchasing goods in an online shop directly with his online banking account.
What steps must buyers and sellers (online merchants) undertake in order to be able to use the sofortbanking payment method? Georg Schardt: After buying online, customers choose sofortbanking as their payment option, select their bank, log onto their online banking system via the sofortbanking software and then release the transfer with their TAN (one time password) without having to register anywhere at all. The transfer is sent immediately and the merchant receives – unlike with a conventional transfer – immediate confirmation that the transfer has been set up and can then ship the goods straightaway. The funds are transferred directly from the customer’s account to the merchant’s account. This gives merchants a fast liquidity.
In which countries is sofortbanking available and what are its main banking partners? Georg Schardt: The system accelerates goods traffic via the internet and works with 99 % of all online banking accounts in seven European countries: Germany, Austria, Switzerland, the UK, Belgium, Italy and the Netherlands.
More and more banks, especially the direct banks, have now become aware of the advantages. The direct banks regard our system as an enhancement to their online banking systems. They were the first to realise that, with sofortbanking, their own online banking system can be used universally via the online channel. The advantages are obvious: the consumer relationship is strengthened and the utilisation increases, which creates higher volumes.
But the biggest advantage – above all in the long term – is that the money stays inside the banking loop and does not wander off into parallel structures. The risk that one of the e-wallet providers (e.g. PayPal), for example, will develop into a competitor for the banks is definitely there. In that area, companies from outside the industry, such as internet businesses or mobile phone providers, are already very much present. They can by all means threaten the banks. In addition, new players like Google and Facebook are also forcing their way onto this market.
What are the top five unique selling points for sofortbanking? What parts of its value proposition prove most convincing in bringing customers (both consumers and online merchants) on board? Georg Schardt: Payment Network believes that the system stands out, as a result of the unique combination of security, simplicity, a higher rate of customer availability and an attractive pricing structure, as well as its international character.
How is data privacy and security ensured for consumers? Georg Schardt: Data privacy and security is one of our highest aims: sofortbanking is certified by the largest German quality and security institute, TÜV, according to best practice data privacy standards. Since its launch in 2004 ,not a single case of data fraud to the detriment of the end consumer has occurred with regard to sofortbanking.
The non-payment rate towards the merchant is by 0.01-0.02 % very low. This means the system is significantly safer than many other online payment systems, especially e-wallets or credit cards. As additional protection for the consumer, Payment Network AG guarantees unlimited protection for every costumer using sofortbanking for the unlikely event of a misuse of the login data.
How is integration achieved between sofortbanking and online merchants’ back-offices? Georg Schardt: sofortbanking developed more than 180 interfaces to different shop systems (e. g. intershop, magento, hypris etcetera.). Therefore it is very easy for a merchant to integrate our banking method.
Could you provide our readers with some concrete examples – let us call them “success stories” of collaborations between sofortbanking and one / more online merchants? What has offering sofortbanking as a payment option at checkout meant for your retail partners? Georg Schardt: Merchants, who use sofortbanking benefit from a higher payment certainty, a higher liquidity, an internal process optimization, a reduction of costs and the internationality of sofortbanking. Moreover, as evidenced by many e-commerce studies, online traders can minimize purchase cancellations by offering different payment methods. More than 20,000 national and international e-commerce providers now use the system, including many large and well-established firms such as KLM Royal Dutch Airlines, the Emirates, DELL, Skype, Kraft Foods, MediaMarkt, Conrad Electronic.
According to the eCommerce-2010-Study by EuPD Research, sofortbanking is the e-payment method used by most users, and the IZH5-Study (2010) of the E-Commerce-Center Handel comes to the conclusion that sofortbanking is one of the fastest growing online payment methods in Germany.
Why would consumers opt for paying online via sofortbanking instead of using a normal online banking credit transfer? What are, in your opinion, the main advantages of using an online banking-based online payment solution? Georg Schardt: Customers have an easy-to-use payment option, a very safe method to pay online, they get their goods faster, which makes sofortbanking in many cases the best payment method available.
As the operator of a successful online banking-based online payment offering, your company is ideally placed to provide a realistic overview of the state of online payments / e-commerce in Europe. What are some of its main characteristics and where is it headed? Georg Schardt: There are two main trends in the European e-commerce space:
What are some of your company’s plans for the future? Are you planning to head into the mobile banking space in addition to the online banking one? Georg Schardt: We are focusing on sofortbanking and its international role, but we are also looking closely to new developments. Furthermore, cooperation with some banks are on the agenda of 2012.
The three main trends in the online payments industry that will impact your business (positively or negatively) this year are … Georg Schardt: Merchants are looking for secure and international payment systems. Especially if merchants are going abroad, a secure system without additional rating requirements is very important, because the merchants do not know the foreign markets so well. This need has encouraged the growth of sofortbanking in 2011 and will stimulate it in 2012.
The Paypers has also had the chance to talk with online retailer notebooksbilliger.de AG about its successful collaboration with Payment Network AG. The interview has been published in our premium newsletter, Online Paypers, Vol.4, Issue 16.