Interoperability, Roaming Key for EU Mobile Payment Schemes to Compete Globally

Competition in the global mobile payment market has intensified in recent years with the emergence of strong Chinese players that are looking to grab a piece of the pie that American payments behemoths Visa and Mastercard have long controlled.

“If you look at the world of payments, in my view, QR code players [like] Alipay and WeChat are really the name of the game. They do things well [and] have an optical way to scan a code or eScan,” Christian Pirkner, CEO of mobile payment solution Bluecode, told PYMNTS in an interview.

Even though Europe is quite behind the game on the global stage, Pirkner said Bluecode’s European payment solution has the legal and technical rulebook to “do payments the European way” in order to win in the region.

He added that includes providing a rulebook for its issuing and acquiring banks to pay directly from users’ checking accounts, as well as a technical platform to scan and initiate a transaction, like AliPay and WeChat.

Read more: Seven EU Firms Form X-Border Mobile Payment Network

The company enables cashless payments via smartphone and smartwatch, generating a unique, one-time barcode called the “blue code” — named after the blue barcodes used in Europe — every four minutes to ensure a highly secure payment process. Once a merchant scans that code, it triggers a transaction at the checking account of the respective issuing bank in real time.

According to Pirkner, scanning the code then triggers value-added services, enabling consumers to also link their loyalty card, employee card, various points and rewards to the transaction in real time.

“We’re basically doing what Amazon did 10 years ago in retail and in eCommerce — it’s a one-step checkout. You just showed this [blue] code and all the magic will happen in the back end,” he said.

Bluecode has also been designed in an anonymous way to adhere to strict European data privacy rules. The firm doesn’t have access to the name or the account number of the payer, as their scheme performs these checks in real time.

With legal foundations in Germany, Pirkner said the system has also been built with a European framework in mind, ensuring that fees are stabilized and kept at a standard rate long term.

“This is set in stone and if you are basically a bank in Europe or an app in Europe, you can invent or stuff and you know the model in the model will not change,” he said.

Today, the independent scheme that is not bank-backed like most players in the region has a growing member network of more than 400 banking members in its scheme. Pirkner said there are also plans to increase that figure threefold this year as it works on onboarding large merchants in the German-speaking regions of Austria and Germany where it operates.

EMPSA: Pan-European Mobile Payment Scheme

According to Pirkner, Asian players like Alipay and WeChat are changing how commerce works, enabling consumers to easily travel, book a hotel or pay with a card.

“In the Asian markets, Alipay and WeChat do this so well — [and] once you do payment well, you can start to change the value chain, you can change how customers interact with any type of service, and that is really advanced,” he explained.

For now, European payments lag far behind because most markets like Germany are still heavily cash-driven — and even in areas where it’s somewhat card-driven, credit cards are still far behind.

“There are only a few pockets, like in the Nordics, Switzerland or in Poland, [which are] at the forefront of becoming very similar to how the Asians [operate], but if you look at France or many other countries, they are still way behind,” he said.

To solve this, he said leveraging bottoms up and providing a roaming solution — like the European Mobile Payment Systems Association (EMPSA) is trying to do — is the best way to go.

Formed in 2019, the 14-wallet association is aiming to build interoperability among participating payment systems, bringing together more than 70 million mobile payment users, over a million merchant acceptance points and hundreds of European banks handling several billion transactions per year, according to information provided on its website.

For Pirkner, adopting that pan-European strategy will enable mobile payment schemes to capture and own the mobile journey, “and whoever has the journey will rewire how the industry works beneath, plumbing together the APIs [application programming interfaces], plumbing together the tools of the trade to maximize revenue.”

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