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Payments General

"Cash, Check or Mobile?" – Cash for the time being.

Wednesday 8 April 2009 | 05:30 PM CET

The 8th EPCA Payments conference in Berlin, organized by Innopay and SCC provided some extraordinary insights in the world of mobile payments.

The organization did a good job in inviting pivotal speakers from the European Mobile Payments scene.
Fred Stortelers, representing Dutch NFC-based mobile payment initiative Payter revealed some valuable lessons learned from the past two years.
Initially Payter, which aims at conquering the Dutch POS payments market, focused on enabling payments before enabling additional services. Trial participants (consumer side) were given a free NFC-enabled mobile phone (2,400 phones distributed, 1,500 still active), and an NFC wallet loaded with EUR 50. Merchant participants’ received a new point of sale terminal, able to accept NFC payments. Also free of charge.
After two years Payter found out that it is not able to compete with existing payments solutions. Incumbent methods like debit card or cash are part of consumers’ daily routine, and consumers don’t have to pay for it. Consumers do have to pay for using Payter. It doesn’t take a degree in rocket science to see that consumers are not willing to pay extra for an NFC transaction, when other incumbent means of payment are free of charge.
Payter’s key observation is that it is not possible to compete with incumbent, efficiently organized, cheap payment infrastructure. And although users are happy with the Payter service (I know I’d be happy too, if I were to get EUR 50 and a simlock-free mobile phone for free), they are not frequently using them. Terminals are gathering dust at tanning salons and since it’s such a rare occasion that they’re used employees don’t know how to operate the terminals. A sobering conclusion is that it has costed Payter about EUR 15 million to find this out. This is half a million per month to be exact.
Payter therefore has shifted its focus on peripheral services like advertising and smart posters. Also, Payter has ventured into the business of developing their own NFC-enabled POS terminals. Fred Stortelers form Payter told The Paypers that he expects that this initiative will earn back Payter’s invested millions.
Patrice Hertzog from Credit Mutuel appeared somewhat deaf to this story. Credit Mutuel is part of the consortium of banks and MNOs involved in the French ‘Payez Mobile’ scheme. The NFC-based initiative is unique in its kind in the sense that both MNOs and financial institutions are involved in the trial and have achieved interoperability. This is actually quite an achievement: someone with a SIM card issued by Orange and Credit Mutuel, can pay at a terminal of Banque Postal.
However, the expensive ‘lesson learned’ from Payter, do not seem to have been considered here. Consumers in the Payez Mobile trial are enthusiastic, praising the system for its technical advance, coolness factor, but for sure are not willing to pay extra for it. Nor will merchants, if it does not bring additional customers to their shop. In France too, the initiative has to compete with existing payments methods and no doubt is going to lose that battle. The EUR 15 million lost by Payter apparently is not enough…


The European Payments Consulting Association (EPCA) is a pan-European association of independent national consultancies, each of which has expertise in payment systems and payment products. Each year EPCA organises an international conference. The 8th EPCA Conference was held in Berlin on 30 & 31 March and 1 April 2009 and was organised by Innopay and SCC.

Also read our other reports on EPCA: 

EPCA: The payments consultant’s conference

Innovations: believers and business planners

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