Regulators recognize digitalization and increased economic speed and derive the necessity of a new payment instrument that accelerates payments. This is assumed to address the consumers’ behavioural change due to instant messaging, which substantiates a new consumer demand for instant payment execution. Subsequently, a new electronic payment instrument was conceived by the European Central Bank (ECB) and further refined by two industry stakeholder associations. This concept for a new payment system is commonly referred to as “Instant Payments” and shall be the field of attention for this thesis.
This work has two main objectives in regards to the European concept of Instant Payments as in discussion today. The first aim of this work is to examine the factual basis for the ECB’s rationale by analysing the German payment market ultimately aiming at a conclusion on the attractiveness of an Instant Payments solution for the German payment market. Subsequent and referring to this market examination, the second objective is to identify a suitable design and a possible implementation approach for an Instant Payments solution in Germany.
Table of contents
1. Introduction
1.1. Background
1.2. Field of attention: concept of “Instant Payments” in Europe
1.3. Objective and research questions of this work
1.4. Scope and structure of this work
2. Setting the Stage: The German payment market today
2.1. Characteristics and distinction of electronic payments
2.1.1. Evolution from physical exchange to electronic payment
2.1.2. Electronic versus cash payments
2.1.2.1. Advantages
2.1.2.2. Disadvantages
2.1.3. Common denominators of electronic payments instruments
2.1.3.1. Cash payment
2.1.3.2. Credit transfer
2.1.3.3. Direct debit
2.1.3.4. Scheme-based payment
2.1.4. Payment culture in Germany
2.2. Instant payments as a new method of electronic payments
2.2.1. What has been defined in the Euro-area to date?
2.2.1.1. SCTInst scheme
2.2.1.2. EBA CLEARING Blueprint
2.2.2. Non-EUR example: Faster Payments
2.3. The market for electronic payments in Germany
2.3.1. Market characteristics
2.3.1.1. Supplier Power
2.3.1.2. Buyer Power
2.3.1.3. Threat of Substitution
2.3.1.4. Threat of New Entry
2.3.2. External market influences
2.3.2.1. Political, legal and regulatory factors
2.3.2.2. Technological influences
2.3.2.1. Economical factors
2.3.2.2. Social factors
2.4. Change and innovation drivers
2.5. The concept of Instant Payments as innovation approach for Germany
3. Research approach
3.1. Research design
3.2. Research Methodology
3.3. Choice of sample and timing
3.4. Limitations
4. Results of the research
4.1. Consumer’s and organisations’: Results from a secondary source
4.2. What do the experts say? Results of the qualitative research
4.2.1. Overall considerations
4.2.2. Attitude towards Instant Payments
4.2.3. Definition of Instant Payments
4.2.4. Contributors to Instant Payments
4.2.5. Rationale for Instant Payments’ attractiveness in Germany
4.2.5.1. Chances
4.2.5.2. Risks
4.2.6. External influences
4.2.7. Design proposal for the German market
4.2.8. Implementation roadmap
5. What does the research add in the defined framework?
5.1. Trends
5.2. Uncertainties in the expert group
6. Conclusion and recommendation
Objectives and Research Themes
The primary objective of this thesis is to critically assess the attractiveness of the European "Instant Payments" concept specifically for the German market. It aims to determine whether Instant Payments represent a viable solution for electronic retail payments in Germany and to identify a suitable design and implementation strategy for such a system, considering existing market characteristics and stakeholder needs.
- Analysis of the current German payment market landscape and cultural payment preferences.
- Evaluation of the "Instant Payments" concept as an innovation approach for Germany.
- Examination of supply-side and buyer-side market power dynamics using Porter’s Five Forces.
- Identification of key innovation drivers, including digitalization and regulatory changes like PSD2.
- Development of design proposals and an implementation roadmap based on expert qualitative research.
Excerpt from the Book
2.1.1. Evolution from physical exchange to electronic payment
As stated, in the introduction value exchange has been a basic concept of human communal life and society for centuries and evolved as the key criterion for economies globally. In this turn, economies have developed from exchange of goods to the creation of independent units of value, the money (Lammer, 2006, p. 1). These units of value have originally been attached to the actual value of their physical representation, mostly in form of coins or other units of valuable material, but been more and more detached from their tangible character (Wahlers, 2013, p. 4; Manning, Nier, & Schanz, 2009, p. 21). According to Simmel’s philosophical analysis of money, this detaching manifests the definition of money as a separate dimension besides the value that is exchanged. This leads to the assumption that money is a separate measure of value that per se defines the relation of the things exchanged. (Simmel, 1930, pp. 160/161; Toussaint, 2009, p. 1) The existence of physical money constitutes whole business sectors and it holds its important role on the dimension of value exchange enablers, but never ceased evolving (Kißling, 2003, p. 2). This significance of money as a separate dimension and the evolution of money to complex payment instruments is the rationale for the foundation of industries around this dimension (Bott & Milkau, 2016, p. 3).
Together with the dematerialization of money, which is separating the value from its carrier, the existence of deposit money is manifested (Unruh, 2004, p. 15). Any representation of money serves the conservation of purchasing power and is thereby clearly advantageous in comparison to keeping goods (Hartmann, 2002, p. 389; Toussaint, 2009, p. 1). Usage of money furthermore serves the spatiotemporal decoupling of an exchange (Frank, 2002, p. 22).
Summary of Chapters
1. Introduction: This chapter provides the background of payment evolution and defines the research scope and objectives regarding Instant Payments in Europe and specifically Germany.
2. Setting the Stage: The German payment market today: This chapter analyzes current payment methods, market characteristics, and the impact of technological and regulatory drivers on the German payment landscape.
3. Research approach: This chapter outlines the qualitative methodology, including expert interviews and the rationale for selecting a mixed-method approach to fill existing research gaps.
4. Results of the research: This chapter presents and categorizes the findings from secondary data and primary expert interviews regarding the attractiveness, definition, and potential design of Instant Payments.
5. What does the research add in the defined framework?: This chapter synthesizes the findings to identify key trends and uncertainties discovered during the research process.
6. Conclusion and recommendation: This chapter concludes the thesis by confirming the attractiveness of Instant Payments for buyers and suggesting strategies for implementation by banks and payment service providers.
Keywords
Instant Payments, German Payment Market, Electronic Payments, SEPA, SCTInst, Digitalization, Payment Innovation, Payment Service Providers, Banks, Consumer Behavior, PSD2, Fintech, Payment Infrastructure, Market Analysis, Clearing and Settlement
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on the critical assessment of Instant Payments as a potential new electronic retail payment method within the German market, evaluating its attractiveness for different stakeholders.
What are the primary themes discussed?
Key themes include the historical evolution of payment systems, an analysis of the German market structure, the role of regulatory and technological drivers, and the potential design for an Instant Payment solution.
What is the ultimate goal of the research?
The goal is to answer why Instant Payments are attractive for the German market and to identify a suitable design and implementation approach for such a solution.
Which methodology was applied?
The research uses a qualitative approach, primarily consisting of semi-structured expert interviews with industry professionals, complemented by a secondary analysis of external research studies.
What does the main body cover?
The main body examines payment characteristics, current market characteristics (using Porter’s Five Forces), external environmental influences (PESTEL analysis), and presents primary research results from experts.
Which keywords define the work?
Key terms include Instant Payments, German Payment Market, SCTInst, digitalization, payment innovation, and regulatory frameworks like PSD2.
Why are German banks viewed with skepticism regarding Instant Payments?
Experts doubt the banks' speed of innovation and their ability to provide a centralized, efficient infrastructure due to legacy IT systems and complex, decentralized banking network structures in Germany.
What role does the SEPA SCTInst scheme play?
The SCTInst scheme is seen by most experts as the feasible baseline for an Instant Payment solution, though they argue that it serves as a starting point rather than a final, comprehensive answer for all user needs.
- Citar trabajo
- Rebecca Marx (Autor), 2016, Critical Assessment of Instant Payments as a Solution for the German Market, Múnich, GRIN Verlag, https://www.grin.com/document/347027