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From cash to contactless: how VIMpay and Fidesmo are changing the German payment market

In our latest look at the contactless payment market, we talk to Manuel Thoma, Head of Marketing at German payment provider petaFuel and Head of Sales at Fidesmo, Ulrich Dreefs.

Hi there, let’s start with a quick introduction.
Manuel: petaFuel is a modern payment provider and card processor. We develop innovative solutions and apps for banks and consumers. This includes the VIMpay app, which we launched to manage our contactless payment services when we saw the fantastic potential on offer. I’m the petaFuel and VIMpay Marketing Manager.

Ulrich: Fidesmo provides a platform for secure contactless transactions whether it’s from a wearable or mobile via an NFC chip. We connect banks, credit card companies, wearable manufacturers, and service providers. I’m the Head of Sales and German Country Manager.


Germany is a fairly conservative market, where cash has been king for consumers, how does this impact your business?
Manuel: It’s true. But public opinion is beginning to change. We’re seeing a real upturn in interest. Contactless became a buzzword during the pandemic – there were signs in virtually every supermarket saying please pay contactless. And Google and Apple are communicating their contactless services, which helps build awareness. Also, with VIMpay we created a bank-independent solution so larger, well-established banks’ customers can connect a Mastercard to a wearable and make contactless payments on the Fidesmo platform. This provides a great channel for customer growth.

Ulrich: I can only echo that. When we entered the German market in 2019, most smaller stores only accepted cash or the Giro card, the German national interbank network and debit card. Today, it’s a completely different picture, most stores have contactless payment readers and accept many cards. Thanks to this, more and more people are beginning to adopt the technology. It’s exciting times for us, for payment providers and for wearable manufacturers.


It’s quite a step moving from paying with cash to paying with a wearable, how are you driving adoption?
Manuel: We’ve been running campaigns together with our partners which have had a big impact in the media, on social, and in the home. As a mobile payment app, we can be more daring in our communication than many banks. We’re essentially selling contactless as the fun way to pay and it’s proving to be a great success – our wearable partner Pagopace released a campaign a few weeks ago for their contactless rings, which sold out within a week. But then, we also have to promote and inform the market about security – which is a key element of our business and the Fidesmo platform.

Ulrich: The step to cards has been taken. The next evolution step on payments is that consumers just want to pay with the device of their choice, they don’t want to be limited. And this is where Fidesmo Pay comes in with our partners. We make contactless payments simple and secure and our platform is wearable agnostic – so virtually any wearable provider can join it. For example, a watch company can embed NFC chips into their straps and start offering contactless payments to customers on our platform. But a watch manufacturer would never set up a credit card operation. And wearable companies don’t have to do that either. This opens up the market to many companies and, with more companies offering and promoting contactless payments, market adoption increases.


Talking of security. How secure are contactless payments with wearables?
Manuel: People are naturally concerned about security, which is why it’s important we educate them about contactless payment technology. Thanks to tokenization, wearable payments are more secure than card payments. Essentially, the credit card number is replaced with a unique token specific to the wearable, and it’s the token that is used at payment. This minimizes fraud and, if stolen, it cannot be used to run up big debts. You cancel the token and can still use your card. We are a payment provider; security, payments and offering the best customers the best control of their finance is our core business, which is why we insist on tokenization for contactless payments.

Ulrich: I often refer to wearable payments as card payments with an extra layer of encryption. Tokenization is one of those things that people use, such as for their Netflix subscription payments, without knowing it. As a company operating in the finance industry, we are bound by strict regulations and must deliver high security solutions to partners and consumers, which is why we utilize tokenization technology.


How do you see the future of contactless payments in Germany?
Manuel: I think we’re at the tip of the iceberg right now. When we began our collaboration with Fidesmo our vision was to offer people the opportunity to pay with whatever wearable they want, no matter who they bank with. But so many things have happened since then that are contributing to growth, so I expect to see rapid expansion. Early adopters are already influencing the market. New and existing wearable companies will come with added services and innovations. Fashion houses will see the potential and start offering contactless, which can even be incorporated into NFC chipped clothing. I can see a market for parents giving their children wearables that they can top up without worrying about cards being lost and used. The opportunities are endless.

Ulrich: The future is bright. As an aggregator of contactless transaction services, we create an ecosystem for all our partners. As more companies come on board, the service offering becomes more attractive to consumers. There are great opportunities for growth, which is why we’re seeing wearable manufacturers on the Fidesmo platform entering the German market. For us, it’s also important to work with partners like VIMpay who want to be actively involved and are investing in communication to the public. Together, we’re growing the market.


And looking beyond Germany, how do you see market growth?
Manuel: We’re currently providing contactless services in Germany and Austria, but we plan to roll out VIMpay in more European markets. It’s been a great learning curve working in our home market, but there is such a big potential for contactless payments that we want to take it beyond traditional German speaking borders.

Ulrich: We’ve made the same journey ourselves – as a Swedish company we’ve expanded into the rest of Europe and beyond. Making the onboarding process easy for partners and being able to offer contactless payments with both Mastercard and Visa has been key to this expansion. So, we welcome VIMpay’s plans and will support them as much as possible – and based on my experience of working with them I’m convinced it will be a success.


Finally, do you use a wearable to make contactless payments?
Manuel: Absolutely. Once you’ve tapped your wearable to pay, you don’t want to go back. I’m using a Pagopace ring and a Tapster watch strap at the moment. It’s super convenient and always gets a positive reaction when I pay.

Ulrich: Not just one – all of them! Paying is a great experience. You just need to try it once and it will change the way you pay forever!


About petaFuel
petaFuel is a modern payment provider and certified card processor providing customized and innovative payment solutions and mobile applications for banks and companies in Europe. The company created the VIMpay mobile payment app together with its own E-Money Institute PayCenter for contactless payment services.