Dhe Germans love their cash – but mobile payments are also trendy. After all: around 17 percent of consumers took out their smartphone at the checkout last year. This is confirmed by a survey by the retail research institute EHI. Two years earlier it was ten percentage points less.
“The corona pandemic has fueled the trend towards cashless and contactless payments. And with it mobile payment, too, ”says Kevin Hackl, banking and finance expert at the Bitkom digital association.
He believes the use of paid apps is increasing. “The technology is already established at large retailers, and small shops will also soon jump on the bandwagon.”
Large selection of payment apps
If you want to pull out your smartphone instead of your wallet to pay, you need an app. The selection is large – and a bit confusing. Many German banks offer their own payment systems, but not all of them. These include the Volksbank and Raiffeisenbanken with the VR Banking app or the Sparkassen with the Mobile Payments app.
There is also Apple Pay and Google Pay, and smartphone manufacturers such as Samsung and Huawei also offer their own apps. Some supermarkets such as Edeka or Netto also enable mobile payment via their customer app.
Some of them can even be installed on smart watches. What all systems have in common is that there are no extra costs for the user.
Smartphone as a means of payment
“Apps make paying pretty easy,” says Markus Montz, digital expert at the trade magazine c’t. A customer usually stores the data of a credit or debit card in the payment app. If you don’t have one, you need a provider who also accepts the giro card or PayPal.
Technology with radio waves symbol
“The most common in Europe is NFC technology.” This is a radio chip in the smartphone that sends the data to the retailer’s device when paying.
Such a chip is not only built into the smartphone, but also in giro or credit cards, which can be used to make contactless payments. Customers can tell whether a retailer is using the technology by means of notices with the radio wave symbol.
At the checkout they then have to unlock the smartphone, depending on the provider, open the app and hold it against the card reader until a payment confirmation appears.
“Normally, you don’t even have to enter the PIN on the terminal. Unlocking the cell phone is sufficient for legitimation, ”says Montz.
Some apps use a QR or barcode instead of NFC. For example Huawei, which works with the company Bluecode, or the systems from Lidl, Edeka and Netto.
“For payment, the app generates a code on the mobile phone that the checkout staff scans with the reader,” says Montz. To do this, the smartphone must be unlocked and the app open.
More security than many assume
Most people who have not yet dared to use mobile payment indicated security concerns in the EHI survey. From a technical point of view, it is even a bit safer than using a physical card, since the card number is not stored on the device. “In addition, biometric data can be used,” says Hackl.
If the smartphone is unlocked with a fingerprint or face scan, the stored card is clearly assigned to the user. “With the NFC system, instead of the stored card data, the chip transmits a transaction code, the so-called token, which can only be used for this one purchase.” QR or barcodes are also only valid once.
And the NFC chips in the smartphone can hardly be read without authorization, says Montz. Because when the screen is off, the same usually applies to the chip. “Even if it is active, a thief with a reader would have to get within four centimeters. That hardly goes unnoticed. “
Should he then actually steal money, he would have to transfer it to an account and thus leave traces, says Montz. “Pickpocketing is easier and safer for a criminal.”
Data protection depends on the provider
As far as the data is concerned, mobile payments are economical, at least in terms of the account number. “The retailer only knows the transaction number of the payment process. The account details remain between the customer and his house bank, ”says Hackl.
How things stand with other data, however, depends on the provider of the app. The house bank’s program is certainly the most data-efficient.
“With the integrated mobile payment solutions of the supermarket chains, on the other hand, customers share information about their purchasing behavior with the provider. In return, they receive discounts or offers. ”Hackl says that those who use this pass on just as much data as consumers who use plastic loyalty cards.
This is also confirmed by a study by Stiftung Warentest, which last examined apps for mobile payment in 2019. Accordingly, customer cards and bonus programs have collected who is buying what, when and where.
On the other hand, no data flowed to Apple. “The company shares in the fees that merchants pay to payment service providers, as does Samsung Pay. These companies therefore don’t need the data for their business model, ”says Montz.
Not every payment app runs on every smartphone
When choosing their payment service provider, consumers are restricted depending on the device. The provider’s payment app is preinstalled on most smartphones.
iPhone owners don’t have much choice, Apple Pay runs almost exclusively there, the manufacturer does not allow other NFC apps. After all, almost all of the major banks are now working with the company.
Only customer cards from supermarkets and systems with QR or barcodes can also be installed there. Android users, on the other hand, have the choice between the payment app of their smartphone manufacturer, that of their bank, if one offers one, Google Pay and customer cards.
In terms of security and simplicity, mobile payment is a real alternative to plastic cards. But as long as businesses still insist on cash, consumers have no choice but to have a few bills with them.
Paying with the mobile phone should become more secure
Shopping, pulling out your wallet, paying: Absolute routine in the last few years. With the “mobile payment” comes a new type of payment method. But for many Germans it is too insecure. That should change quickly.
Source: WORLD / Fabian Dittmann