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Will cash-loving Germans swing towards mobile payment apps?

Compared to other regions, German-speaking countries have traditionally been somewhat lethargic to adopt new technologies that shape the way customers behave and interact. It happened with credit and debit cards and it is now happening with mobile payment solutions. However, the major fuel retailers like Shell, BP and Total are already looking at ways of implementing these solutions in the DACH (Germany, Austria and Switzerland) market.



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In August 2017, Shell Deutschland Oil GmbH took a step forward and trialled its brand-new Shell SmartPay solution, developed together with Scheidt & Bachmann and with PayPal as the service provider, in the German cities of Hamburg and Berlin. After seven months of piloting the payment feature, the international oil company will announce the national rollout of the payment app in the coming months.

The Shell App allows for in-car payments with a system that locates the driver through GPS. Once at the site, the customer authorizes himself in the Shell App with a PIN or fingerprint, selects the desired fuelling point and can refuel after the dispensers are released. The petrol station management system controls the release of the fuelling points, and initiates by completion of the refuelling process all subsequent steps, such as the creation of the billing and transmission of a tax-relevant document by e-mail.

The largest fuel retailer in Germany with more than 2.5 million daily customers, Aral, is working on a mobile payment method along with its parent company BP. Their app, BPme, also allows for in-car payments and has just been launched in the UK across a network of 500 sites. Through their German brand HEM, Tamoil is also developing a mobile payment app.

“We still have a cash percentage of 37% in Germany”

Apart from the oil majors, third-party solutions are bound to take a share of the mobile payment segment at gas stations. clever-tanken, Germany’s leading app to check fuel prices, told PetrolPlaza that they will be will launching a solution for mobile payment at the pump in 2018.

Steffen Bock, from clever-tanken, expects German drivers to start using mobile payment solutions at forecourts, “not necessarily dedicated apps, but apps with mobile payment offerings.”

For fuel retailers, the benefits of having an exclusive app are clear but small and medium operators will probably have to rely on third party apps as they do not have the resources to develop their own.

“There is a lot of movement in this direction. The big retailers push their own app and it seems like medium retailers will go for third party apps such as clever-tanken. We’ll support both formats but it will be interesting to see which ones will have the biggest success,” says Dr. Michael Lenders, CTO of Scheidt & Bachmann.

German software provider Scheidt & Bachmann implemented the mobile payment logic to the Shell point-of-sale network and created a server component that sits between the POS and Shell’s global web services.

According to Lenders, there are two main advantages when talking about mobile payment solutions at the forecourt. Firstly, you can reduce the amount of time spent in the station by 50% for those customers who want to get in and out, although that same person may come back later in the day just to purchase a convenience item. Secondly, cash or card users are anonymous to retailers; with the use of payment and ordering apps retailers will be able to build new relationships with their customers, analysing patterns and making personalized offers.

 “These processes start slowly, normally pushed by a technology-friendly group of people. We still have a cash percentage of 37 percent. We don’t think that it will be all mobile and no cards in 5 years. It will probably be a lineal growth in the DACH region. In other parts such as the Nordics or in Asia, the growth is a lot faster,” says Lenders.  

Austria, Germany and Switzerland all share this loyalty to cash. In Switzerland, for example, almost all of the 2,000 outdoor payment terminals (OPTs) that Scheidt & Bachmann has at forecourts are equipped with cash acceptance.

The challenges for mobile payment apps

Apart from a community that tends to adapt to payment solutions later than others do, there are certain challenges that remain for payment apps at forecourts in the DACH area.  

A key issue for major fuel retailers is the fact that most payment solutions are individual to each country. That is due to three main reasons: apps themselves follow different marketing strategies that aren’t suited to more than one country; the payment methods are different, Esso uses Apple Pay in the U.S. and the UK but would not be able to do so in Germany – even the DACH countries don’t share some payment solutions; and the different POS systems.

Increased regulations is the other key topic, says Lenders. “The European Union’s latest regulations for e-commerce, fleet card and mobile payments are starting to be implemented in Germany so we expect a lot more regulations. The law doesn’t actually tell you what to do technically so we are following it closely to see how it affects the payment industry. Governments will start to regulate non-traditional payments.”

The DACH community seems to agree that, even if they are little slow to adapt to these new solutions, it will give them the time to look around and see what works. A market of around 18,000 gas stations and almost 100 million citizens awaits the mobile payments revolution.

Written by Oscar Smith Diamante 

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