Mobile Payment

Card payment becomes even more popular

German consumers still prefer to pay by card in retail. The increasing popularity offers opportunities for innovations such as biometric recognition, but also has its downsides.

Jun 06 2022

The customer waves and smiles at the camera - and the purchase is paid for. What sounds like science fiction is already reality in some supermarkets in the Brazilian city of São Paulo. Thanks to biometric recognition, Mastercard credit card holders simply have to hold their face up to a camera and they are accepted as paying customers. 

They can safely leave the card itself behind. This is still an experimental project by Mastercard, which is intended, among other things, to sound out consumer acceptance and technological feasibility. In any case, it requires the customer's willingness, especially since their biometric data must be deposited with the merchant. 

This payment method may be unusual, but it is nevertheless typical of the rapid upheaval in payment that can be observed worldwide and was driven by the Corona pandemic. Cashless payments have become indispensable across all industries and regions.

Because of the hygiene regulations during Covid-19, consumers were urged not to take coins and notes in their hands, but to pay by card, smartphone or smartwatch.

The availability of card terminals has now become indispensable even for smaller merchants. © Unsplash/Clay Banks

Girocard booming, cash shrinking 

And the trend can no longer be stopped, even after the end of most corona restrictions. This is proven by the latest figures on payment systems in the German retail sector, which were collected by the EHI (Research and Education Institute for Retail).

According to these figures, the share of card payments in turnover has risen in the past two years from slightly more than 50 percent to almost 59 percent; cards now account for almost 38 percent of transactions (previously about 26 percent), with the Girocard being the number one. 

Cash, on the other hand, continues to lose importance: in the German retail sector, cash only accounts for a little more than 38 percent of sales. This is not only due to the aforementioned hygiene, but above all to the speed: holding a card in front of the terminal is much faster than having to search for notes and coins. Especially since the earlier reservations about contactless payment (keyword NFC) have been almost completely dispelled in the meantime.

Smartphone and app payments will continue to grow in importance. © Unsplash/naipo

Debate about the Girocard 

Merchants, according to the latest statistics on the most popular payment methods, have to remain flexible. Relying on a single method can sometimes have its pitfalls.

Recently, for example, there were problems with card payments in certain retail outlets throughout Germany: Payment terminals for giro and credit cards failed due to a software error. In supermarkets and drugstores, customers had to resort to cash. 

The problem was solved quickly, but angry customers could not be avoided. It is not only examples like these that show that the abolition of cash does not seem realistic at the moment, especially since it is not an issue politically.

Moreover, there will always be customer groups who want to continue holding "real" euros in their hands instead of a card. In this context, it remains to be seen what effect the expected upheaval at the banks will have: According to media reports, some banks want to move away from the Girocard in order to focus on debit cards. 

It is conceivable that banks would then only offer the currently popular Girocards for a fee, while a debit card would be free of charge. Accordingly, the furniture trade would also have to be ready for this development; in addition, there is the increasing importance of multi-channel concepts (combination of stationary trade and online business) – on the internet, purchases can only be made with a card or payment methods such as PayPal.  

Innovations such as biometric payment in Brazil are therefore becoming more important - provided that they are accepted by the respective target group. However, experts believe that a choice of different payment methods remains just as important.

After all, technical problems cannot be ruled out in the future and the willingness of consumers to accept delays has clearly decreased. When paying, convenience and speed are now the most important parameters.  

Author: Robert Prazak 

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