Exploring the Rise of E-wallets in Germany's Online Payment Landscape

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Management Research Methods (MRM)
“Rising popularity of E-wallets among the Online Customers: Analyzing the German
Payments Ecosystem”
Students Number –
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Executive Summary
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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Literature Review (750 words)..................................................................................................5
2.1 German Payment Ecosystem.................................................................................................5
2.2 Increasing popularity of specific E-wallets among the Online German consumers..............5
2.3 Benefits of digital evolution to the consumers as well as to the German government..........6
3.0 Main Body Analysis (500 words)..............................................................................................7
4.0 Research Methodologies (1500 words).....................................................................................8
4.1 Application of the methodologies..........................................................................................8
4.2 Contribution of methodologies to Theory and Research.......................................................8
4.3 Gap in Methodologies............................................................................................................8
Conclusion (500 words)...................................................................................................................9
Reference List................................................................................................................................10
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1.0 Introduction
The rapid growth and spread of cross-border ecommerce has swiftly precipitated the growth of
alternative payment systems and techniques worldwide. The introduction of new circumstances
such as mobile and wearable payment techniques has allowed the diversifying of more
alternative payments techniques and options in the market having their own particular slots. The
purpose of the report is to provide the learners with the understanding and acknowledgement of
management research methods in the research topic. The advancements and propagation of e-
wallets has strengthened with the introduction of various potential devices including Samsung
Pay, Apple Pay and many more. The report will also include a section of literature review that
will be concerned with the discussion on increasing popularity of e-wallets among the potential
online consumers. In the German Payments Ecosystem, a majority of the alternative payment
methods and solutions are being introduced that have been successful in gaining importance and
reputation among the potential online consumers in Germany. The report will also consist of a
analysis section that will document the research questions and theories utilised in the literature
part.
The payment landscape of Germany has always been fascinating and ever changing. Germany is
termed as a successful and straight debit country because the payments in cash are always
preferred for situations of single payments and small denominations. The report will include a
section of research methodologies that will discuss its implementation and contribution to theory
and concepts. However, the advancement and digitalisation of the German payment landscape
has helped in the devising of innovative payment products and techniques.
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2.0 Literature Review (750 words)
This section covers the explanation of the rising popularity of e-wallets and alternative payment
methods and techniques among the potential online consumers with reference to the German
Payment Landscape. In this section of the report, some measures that the German government is
considering to implement will also be discussed.
2.1 German Payment Ecosystem
The Direct Debit Scheme, 1960 was introduced during the German legacy and this scheme
ensured that the German consumers are well aware about their wide-ranging rights to refunds.
This emerged as a key feature that helped in promoting the trust and loyalty of the potential
consumers in direct debits. Additionally, the creditor banks continuously supervise the risks and
threats associated with R-transaction and credit in order to certify that the specific scheme runs
smoothly and successfully. According to a survey by Deutsche Bundesbank, the cash share of
all purchases and sales in terms of Euro currency estimated to be less than 50% i.e. a decrease of
6% by 2014 (europeanpaymentscouncil.eu, 2019).
2.2 Increasing popularity of specific E-wallets among the Online German consumers
The German government’s decision to introduce its consumers to e-wallets and other digital
payments has provided the online consumers with a strengthened incentive to utilise e-payments
and other payment techniques. This has helped the government to drive the acceleration of
substituting expensive cash payment and transactions. In 2017, Vodafone introduced the
consumers with a unique Vodafone wallet that enabled its potential consumers to make endless
in-store transactions (prnewswire.com, 2019). The rapid emergence of digital banks and e-
wallets has accelerated the shift from cash to online transactions. Based on the market approval
and products in market, instant payments and techniques in the German Payment Ecosystem has
reached a valuable market share of every credit transfers. Germany consist the largest amount of
institutions that deliver payment products and services to non-monetary and non-financial
institutions. The standard amount of e-cash that Germans have in their e-wallets is importantly
bigger than in other Eurozone countries. Due to the increasing preference of cashless transactions
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and e-wallets in Germany, the capable German retailers such as Aldi Nord, Metro and Edeka are
updating and customising their payment terminals to cashless terminals (Check et al., 2014).
A new mobile solution introduced in Germany known as Boon i.e. a payment application has
helped in enormous ways for making contactless payments and transactions and has redefined
the payment landscape of the German Payment Ecosystem (ecb.europa.eu, 2019). This has
helped Germany to progress towards a new step in mobile payments and digitalisation. The main
feature of the specific application is that it is user-friendly in nature and it operates via high
safety standards and norms. The mobile application depends on Host Card Emulation (HCE)
that is known as a smart and unique technology that is concerned with the emulation of a specific
transaction card on various mobile devices including smartphones, tablets and many more but
only utilises software programs (Alliance, 2014). This indicates that it is free of any hardware
perk and tends to be more flexible providing safe and smooth transactions in the abridgment of
highly secured encryption standards. HCE indeed is a real game changer for the German
Payment Ecosystem and it has been immensely successful in attracting the online consumers on
a large-scale basis.
2.3 Benefits of digital evolution to the consumers as well as to the German government
The rapid evolution of German payment landscape in terms of e-wallets and online transactions
has provided the online consumers with the easiest way of making payments and transactions
and safety protection. The concept of digital evolution has also affected the German retail
payment ecosystem providing valuable insights into the key areas of the market. Digital
evolution has provided the new entrants and technological advancements with the opportunity to
race into the German markets increasing the demand and preferences for global payment systems
and techniques. Due to this, the risks and threats associated with these systems, techniques have
reduced to a large extent but the risks for infrastructure, and settlement has increased. The
German government is considering playing an active role in designing the shape of the German
payment landscape in order to introduce more services to the consumers (bundesregierung.de,
2018). The main aim of the government is to ensure that the technological and innovation aspect
is always lined-up with the legal structure and ethics of Germany. It can be said that positive
influence of digitalisation can only be introduced in the society if all the parts and sections of the
society welcome it and this is because digitalisation requires the incorporation of values and
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ethics. The German government is working extensively hard in the field of digitalisation or
digital revolution in order to prepare the country for the near future.
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3.0 Main Body Analysis (500 words)
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4.0 Research Methodologies (1500 words)
4.1 Application of the methodologies
4.2 Contribution of methodologies to Theory and Research
4.3 Gap in Methodologies
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Conclusion (500 words)
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Reference List
europeanpaymentscouncil.eu. (2019). European Payments Council. Retrieved 19 February 2019,
from https://www.europeanpaymentscouncil.eu/news-insights/insight/germanys-payment-
landscape-changing
prnewswire.com. (2019). Payments Landscape in Germany: Opportunities and Risks to 2021.
[online] Available at: https://www.prnewswire.com/news-releases/payments-landscape-in-
germany-opportunities-and-risks-to-2021-300565073.html [Accessed 19 Feb. 2019].
bundesregierung.de. (2018). The Digital Strategy of the German government. [online] Available
at: https://www.bundesregierung.de/breg-en/news/the-digital-strategy-of-the-german-
government-1550216 [Accessed 19 Feb. 2019].
Alliance, S.C., 2014. Host card emulation (hce) 101. A Smart Card Alliance Mobile and NFC
Council White Paper.
ecb.europa.eu. (2019). Insights into the digital transformation of the retail payments ecosystem.
[online] European Central Bank. Available at: https://www.ecb.europa.eu/paym/intro/mip-
online/2018/html/1801_insights_digtra_retpaymeco.en.html [Accessed 19 Feb. 2019].
Check, L., Huiskamp, W. and Malinowski, A., 2014. E-commerce trends and payment
challenges for online merchants: Beyond payment. Moduslink Whitepaper, pp.1-25.
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