Skip to main content

The Smartphone Payment Scheme for Europe

Periodic Reporting for period 1 - Bluecode (The Smartphone Payment Scheme for Europe)

Reporting period: 2019-09-01 to 2020-08-31

Bluecode is an innovative and 100% European-owned and based optical mobile payment system that bypasses the foreign-controlled payment conduits.
Our vision is: To provide a purely European payment scheme as an alternative to US-based offerings like Apple Pay or Google Pay.
We started our operations in 2012 and evolved to the Bluecode Scheme (payment network) in 2017. We are the only private owned European optical mobile payment solution connecting European banks, merchants and customers cross-border. We have built a (legal) payment scheme like Mastercard or Visa, but based on European rules and regulation. The payment is anonymous, providing “security by design”. Technologically, we are an optical payment method like Alipay or WeChat, being available on all mobile devices.
We combine our payment solution with value added services (like loyalty card, stamp cards, vouchers etc) and help merchants to digitalize the check-out process by allowing inter alia one-step check out (loyalty card and payment in one step), self-check-out and help merchants to get rid of paper based solutions (stamp cards, receipt, vouchers etc). Banks can keep as issuers the customer relationship with themselves instead transferring it to the huge US companies like Apple or Google. By this, banks also avoiding business models that are using the data of the bank customers for their purposes. We give consumers the possibility to pay with a European payment method, that is anonymous, and fully in line with the European GDPR, but gives the same ease of use as the US solutions and in addition allowing them to combine this with value added services. By this creating an exceptional check-out experience.
What we do is fully in line with the EU strategy in retail payments. The EU commission stated in its Retail Payment Strategy paper, published on 24.09.2020 (COM (2020) 592 final):
“(…) payments have become strategically significant. They are the lifeblood of the European economy. (…)The Covid-19 pandemic has further reinforced the shift to digital payments and confirmed the vital importance of safe, accessible and convenient (including contactless) payments for remote and face-to-face transactions.(…) EU payments market remains, to a significant degree, fragmented along national borders, as most domestic payment solutions based on cards or instant payments do not work cross-border. This comes to the advantage of a handful of big global players, which capture the whole intra-European cross-border payments market. With the exception of those large global players, including worldwide payment card networks and large technology providers, there is virtually no digital payment solution that can be used across Europe to make payments in shops and in e-commerce.”
We have the vision to become this pan-European payment scheme and creating benefits for European merchants, banks, acquirers and consumers.
We successfully brought our payment scheme on par with other schemes by implementing charge back and refund in our scheme. By implementing the loyalty features we brought our scheme on a new level adding features that several other payment solutions cannot do. As our solution is integrated into the cashier system vouchers can be deduced from the purchase price as the cashier process is not close – something a credit card solution that works with the terminal cannot do. Our solution enables consumer to do one-step checks out by using its loyalty card and the payment function with one scan.
The most remarkable progress we could achieve is the finished integration of Bluecode as unique payment method into one very large loyalty membership programme with several million users. The planned go-live is mid of November. We have been allected as partner, because of our loyalty features and one-step check-out capabilities. Together with our partner we will create a unique check-out experience for consumers.
We have been also extended our partner network (acquirers and issuers). Especially in Austria we have had been able to further expand our issuer network by several new banks/bank groups.
The international expansion was slowed down by COVID-19. Nevertheless, we have been able to expand our partner network (issuers and acquirers). We also extended our strategy by the option to get interoperable with successful local optical mobile payment schemes (like TWINT in Switzerland or NiBBS in Norway). We build in 2020 a software bridge which allowed TWINT users in a Proof of Concept event at the Bodensee to pay at Bluecode acceptance points. The event took place for one week at the end of August/beginning of September 2020 and was supported by the European Mobile Payment Services Association (EMPSA) of which Bluecode is a founding member.
As described above we have laid down the basis for further growth. Besides the mentioned integration into the loyalty membership app, we have three further large merchant apps in the pipeline that will go live Q4 20 / Q1 21, including three of the top 10 German retailers. All these projects will make use of our loyalty capabilities. This should give us market traction which will also positive influence the expansion of our partner network.
With this we will get mass adaption and by this creating a pan-European payment solution based on European rules and rails that can compete with the US players like Apple Pay, Google Pay, Mastercard and Visa. With our unique value added services (including the loyalty features) we can create new customer check-out experiences.
Our discussion with partners outside our core markets is ongoing and we are negotiating several interesting projects (e.g. in in Italy with potential acquirers and issuers to make employee vouchers digital and combine it with Bluecode). In addition, we have started talks with some banking communities to license our technology for a whole country.