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Customers say “nein” to Germany’s Yapital

By NexChange

German flag Reichstag

It doesn’t always pay to be a pioneer, as German retail giant Otto Group discovered this week when it shuttered it mobile payments business, Yapital, citing poor customer uptake, competition, and regulatory issues.

Claiming to be “the first European, cashless cross-channel payment solution designed with modern commerce in mind,” the platform launched in 2011, and allowed customers to use QR codes to make payments and pay bills.

Marc Berg, Yapital executive director, put forward a number of reasons for the company’s downfall,  saying that Europe's Interchange Fee Regulation had put pressure on the Yapital’s margins, but the real problem it seems was that not enough people used it.

While retailers were said to love the concept, consumers were far less impressed. In a statement, he said:

At the moment it is simply impossible to forecast business performance in this segment accurately – and above all, the development of the number of end-consumers. While we were already talking about the mobile-payment breakthrough three years ago, today studies indicate there are currently only 200,000 users in Germany.

Despite Yapital's untimely demise , Germany does have a vibrant fintech sector. Only last month credit platform Kreditech raised 82.5 million ($87 million) euros from JC Flowers. But, as the Financial Times reported recently, the country's fintech startups are not without their problems, including risk-aversion among insitutions and stifling regulations.

Photo: David Rosen

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