Periodic Reporting for period 2 - Bluecode (The Smartphone Payment Scheme for Europe)
Berichtszeitraum: 2020-09-01 bis 2021-08-31
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.
With combining our payment solution with value added services (like loyalty cards, stamp cards, vouchers etc) we 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 getting rid of paper based solutions (stamp cards, vouchers, receipts etc). Banks as issuers can keep the customer relationship with themselves instead transferring it to the huge US companies like Apple or Google. By participating on Bluecode, banks are also avoiding business models that use the data of the bank customers for their purposes. We give consumers the possibility to pay with an 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 payment with value added services as an convenient and 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 build this pan-European payment scheme and creating benefits for European merchants, banks, acquirers and consumers. By interconnecting with other existing European mobile payment systems via the European Mobile Payment Systems Association (EMPSA) we enable all EMPSA participants and their customers to access all merchants cross border, cross scheme. . The EMPSA initiative has been recogoniced already on the European level. The EU Commission is mentioning it in its Retail Payment Strategy paper, published on 24.09.2020 as one of the “promising market-driven initiatives” that have emerged with the aim at “increasing cooperation and interoperability between domestic payment solutions” (COM(2020) 592 final, page 4).
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.
With combining our payment solution with value added services (like loyalty cards, stamp cards, vouchers etc) we 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 getting rid of paper based solutions (stamp cards, vouchers, receipts etc). Banks as issuers can keep the customer relationship with themselves instead transferring it to the huge US companies like Apple or Google. By participating on Bluecode, banks are also avoiding business models that use the data of the bank customers for their purposes. We give consumers the possibility to pay with an 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 payment with value added services as an convenient and 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 build this pan-European payment scheme and creating benefits for European merchants, banks, acquirers and consumers. By interconnecting with other existing European mobile payment systems via the European Mobile Payment Systems Association (EMPSA) we enable all EMPSA participants and their customers to access all merchants cross border, cross scheme. . The EMPSA initiative has been recogoniced already on the European level. The EU Commission is mentioning it in its Retail Payment Strategy paper, published on 24.09.2020 as one of the “promising market-driven initiatives” that have emerged with the aim at “increasing cooperation and interoperability between domestic payment solutions” (COM(2020) 592 final, page 4).
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 provide. 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 go-live was in February 2021. We have been sellected as partner, because of our loyalty features and one-step check-out capabilities. Together with our partner we have created a unique check-out experience for consumers.
We have been also extended our partner network (acquirers and issuers). Especially in Austria we have 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) in Spain and Italy. We also adapded 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 German 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. Contracts with Italian and Swiss partners are in the final signing phase so that the first operable interconnection between Germany, Austria, Switzerland and Italy will go live in the beginning of 2022.
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 go-live was in February 2021. We have been sellected as partner, because of our loyalty features and one-step check-out capabilities. Together with our partner we have created a unique check-out experience for consumers.
We have been also extended our partner network (acquirers and issuers). Especially in Austria we have 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) in Spain and Italy. We also adapded 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 German 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. Contracts with Italian and Swiss partners are in the final signing phase so that the first operable interconnection between Germany, Austria, Switzerland and Italy will go live in the beginning of 2022.
As described above we have laid down the basis for further growth. Beside the mentioned successful integration into the loyalty membership app, we have two more large merchant app integrations running, including two of the top 10 German retailers. All these projects will make use of our loyalty capabilities. This should give us more and faster market traction which will also positive influence the expansion of our partner network.
With our direct approach for some European makets and the EMPSA partnering approach we have reached the flexibility to drive forward our Vision of 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 and the progress by acquiring new big merchants with this setup during the Horizon project shows us that the relevance of our solution in the market is high and still growing.
Allthough our progress outside the home markets is not as fast as we planned, we could step into the Italian market and are on the way to do so in Spain in the next few month.
With our direct approach for some European makets and the EMPSA partnering approach we have reached the flexibility to drive forward our Vision of 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 and the progress by acquiring new big merchants with this setup during the Horizon project shows us that the relevance of our solution in the market is high and still growing.
Allthough our progress outside the home markets is not as fast as we planned, we could step into the Italian market and are on the way to do so in Spain in the next few month.