Interview with Bluecode on mobile payments and European payments industry standardisation

The Paypers has sat with Georg Schardt from Bluecode, to learn about the company and how its services enable achieving interoperability between the existing European payments providers in Europe

What is Bluecode for our readers who may not know it yet?

Bluecode is an optical payment method, which is bank account based and set up as a scheme. Consumer banks act as issuers and merchant servicing PSPs as acquirers. The seamless integration of valued added services is one of the key advantages of Bluecode. Loyalty and payment are an integrated part of our solution.  Bluecode delivers the technical capability to integrate loyalty functions into the payment process.

Most importantly though, Bluecode enables banks to offer an account based payment method directly out of their banking app, not having to solely rely on card based schemes, or Apple or Google. To facilitate a bank keeping the customer journey of the payment process the bank acts as an app provider and hereby integrates Bluecode into their payment and banking apps. On the other hand, merchants with a high consumer reach can also integrate Bluecode into their own merchant apps. Good examples are some German first division soccer clubs that use Bluecode as a payment method both online and in the soccer stadium.

Bluecode started in Austria and Germany and is already available at 22.000 cash desks, mainly in supermarkets, retail stores, restaurants and convenience stores.

How does PSD2’s SCA requirements tie into Bluecode mobile payments?

Each transaction initiated via Bluecode fulfils the criteria of PSD2 regarding SCA. But for the consumer it´s still a smooth payment experience. With the ‘possession’ element (device) and inherence element ‘fingerprint or face ID’ it’s simple and secure to use Bluecode for POS and as well for ecommerce transactions.

In September 2019, seven independent mobile payment systems in Europe, Bluecode including, have teamed up to form the European Mobile Payment Systems Association (EMPSA).

How does Bluecode enable EMPSA to reach its goals?

Our common goal is to achieve interoperability between the existing European providers in Europe. In the long run, all European providers will only be successful as long as their solutions will be accepted on European level. The efforts of the European Union on harmonisation, SEPA implementation, and the instant payment initiative support the underlying idea of Europe having alternatives to the traditional card schemes.

Some economists agree that over the last decade, Europe has fallen increasingly behind its major competitors (the US and China) and, at first glance, many ongoing trends appear negative.

What does Europe need to do to regain its competitiveness over the coming ten years, when it comes to payments/ digital transactions/ technology?

Europe has to accept that purely national payment solution will not survive. Only European solutions will have a chance against the big American or Asian players. It's time to hurry, it's time for cross-border cooperation, and it´s time to set up an interoperable infrastructure. If Europe is not fast enough, to regain the competitiveness in the payment sector, this will negatively affect the entire banking and financial industry. Payment rules and rails are the essential connections between the financial and retail industry. With Bluecode, we created an independent infrastructure, which gives consumers, merchants, and banks the opportunity to get independent from the dominant American infrastructure players.

At the end of 2019 Bluecode has received EUR 12 mln investment. In what areas does the company intent to use the funds?

It’s all about growth and reachability. We invest in growing our issuer network and as well our merchant network. In parallel, we invest in our technical infrastructure, to create white-label solutions, which enable our partners to set up valued added services. The deep integration into the cash register of our merchants enables new opportunities. The payment experience at retailers will change radically in the next years (self-check out, loyalty, shift to mobile), and Bluecode invests, to support our bank and retail partners to create new and compelling business models. This shift and opportunity applies to retail stores, sport-stadiums and event-arenas and brings online and offline commerce closer together.The payment layer is an integral part of the user journey and value proposition. Bluecode aims to facilitate this development by integrating account based payment solutions directly into the apps of our banks and retail partners and connecting these stakeholders for mutual benefit.

About Georg Schardt

Georg is the CCO of Bluecode International AG, a European optical payment method which is set up as a scheme. He is responsible for the acquisition of merchants, cooperations with PSPs and internationalization. Georg was for more than 12 years in the payment sectors and one of the initiators of SOFORT, which was acquired by Klarna in 2014.