Just two weeks ago I had written here about the impact of PSD2 on services implementing payment functionalities into their service. And in each of the last two weeks there were stories about companies exactly implementing this functionality. Surely, these services are not powered by PSD2 APIs (because we are still waiting for most of them), however, it is again another proof that PSD2 is just one puzzle piece in the open banking movement.
Deutsche Bank in Germany
The first story was from Deutsche Bank. Users of the Deutsche Bank mobile or web app in Germany are already able since some time to add bank accounts from other banks into the Deutsche Bank frontends (powered by figo). Many banks have followed them since then, but since last week users of Deutsche Bank are also able to transfer money from these non-Deutsche Bank accounts. This must be especially helpful for customers who only have either their current or savings account with Deutsche Bank but the other account somewhere else. Transferring between these two account types is often a reason for users to access their “secondary banking app”, but now this is not required anymore for these users. I am curious how long other banks will take to follow up with that, because if a bank is offering the functionality of aggregating bank accounts from competitors, there is absolutely no reason not to offer this payment functionality as well.
Whatsapp in India
The second story just happened a few days ago in India. Whatsapp launched the beta version of Whatsapp payment for selected users. Even though India is not the FinTech market most Western people are looking at (but probably should!), this long-expected move will not just impact the Indian FinTech landscape.
We have seen other tech companies already experimenting with peer-to-peer payments around the globe. However, for WhatsApp it is the first time addressing this need of their users. I believe there are a few reasons why this is a little different to the attempts of other tech players in the US. Firstly, India is a complete different market with most payments being conducted in cash. Nevertheless, WhatsApp is massively successful in India and the recent demonetisation of certain bills have pushed the country into using more non-cash payment methods. Therefore, this timing might be massively supportive for WhatsApp payments. Personally, I am especially interested what the combination of WhatsApp payment and WhatsApp business in India could enable. Secondly, in India WhatsApp is using a standardised interface called “UPI” (Unified Payment Interface) to enable payments. In other countries tech companies have tried using wallets or credit cards to implement payment functionalities into their service but with limited outcome. However, using UPI is showing a complete different approach which appears to be the more-convenient solution for the customer and also less cost-intense (Google has launched it’s service Tez in India based on UPI as well, and many more tech players are expected to do the same). Even though UPI and PSD2 are not comparable at all, WhatsApp might be able to benefit similarly of PSD2 as they do with UPI in India. Therefore, it will be very interesting to see how the beta test works out for them in India, what the impact will be and if they are able to bring similar functionality already soon to Europe?
Even though we are still waiting for more PSD2 APIs to be released, these news are indicating already where all of this might be coming. Interesting times…