Leistungen // Laterales Management

this is not
how a digital revolution works!

MyWallet, Deutsche Telekom’s digital means of payment has failed and was discontinued in December 2016. This was a surprise for many investors who thought that it would follow the same path as in Estonia, where far more than 80 percent of all purchases now take place on a cashless basis. This is why many companies tried to secure a share of consumers’ transaction volume and, at the same time, start customer loyalty programmes by using electronic cards developed in-house – such as MyWallet. In addition to Deutsche Telekom, the savings banks, cooperative banks and the German Postbank also tried their luck.

Significant cultural differences when paying cash

There are already significant differences with the existing cashless means of payment in Europe. “With regard to acceptance of new payment technologies by consumers, Germany lags behind innovation-friendly regions such as the UK and Scandinavia”, stresses Gökhan Öztürk, a partner at Oliver Wyman management consultants. Both markets report the highest volume and the fastest growth rates in cashless payments. In Germany, however, comparatively large payment volumes are transferred by direct debit. Cash is also a key payment method still. The average amount of cash withdrawals (€129) is relatively high inGermany compared with the UK/Ireland, at €85.

Germans don’t like credit cards

The Germans don’t like using cards and love paying cash and there are various theories as to why this is so. Historians talk of the Germans’ virtually neurotic relationship with money. Everybody is familiar with their grandparents’ stories of how the currency was destroyed in both 1923 and 1945 and how currencies should always be distrusted. Inflation in 1923 and the devaluation of the currency after 1945 were traumatic experiences. Suddenly the currency lost its value. Even today, many Germans still convert their purchases into D-Marks when shopping – 15 years (!) after the introduction of the euro.

Not every new product can be sold

It is surprising then that retail banks thought they could succeed with the introduction of new bank-specific electronic cash cards in Germany. Customers certainly found it strange, as they already had a credit and a debit card and were now supposed to use a third electronic means of payment. This is not how digital revolution works!

Four preconditions must be met for digital products:

- They must produce benefits for customers.

- They must be easy to use.

- They must be a good cultural fit.

- They must be innovative.

If start-ups had advised the banks, most would have advised against the development. However, the idea of developing their own digital card was developed internally in all banks. If only they had listened to Albert Einstein: “We cannot solve our problems with the same thinking we used to create them.” Unfortunately many corporate cultures tend to think in such terms.