German retail giant Otto Group is to close down its Yapital mobile payments service due to the “highly competitive but slow-developing digital payment business”. Yapital is to remain active as an e-money institution in the business-to-business (B2B) market, however.
Yapital was launched in 2011 and worked via QR code at the point of sale. It was available in a number of retail chains in Germany including Rewe Group supermarkets, Gortz, Novum Hotels and European Games Group as well as the Otto-owned SportScheck, Baur and Arqueonautas chains. It expanded its service to enable payments from advertising media in May 2014.
“Consumer behaviour is changing much more slowly than all market observers anticipated,” Otto Group says. “As part of this decision, we will close existing Yapital user and retailer accounts on 31 January 2016 and terminate them with the agreement of the relevant partner companies. Yapital’s Hamburg location will also be closed.
“Although Yapital’s commercial operations as an e-money institution will remain at its Luxembourg location, headcount will be reduced significantly. The Otto Group is reviewing options to place employees elsewhere within the Group.”
“At the moment, it is simply impossible to forecast business performance in this segment accurately and, above all, the development of the number of end-consumers,” says Marc Berg, Yapital executive director.
“Owing to the falling margins as a result of a change in the law (Interchange Fee Regulation), we believe we cannot profitably win over consumers to new payment systems such as Yapital in the absence of strong partners with a broad customer base. Consumer behaviour is changing too slowly for this. We were optimistic to the end but, ultimately, things did not work out.”
“In the B2B area, we have already established many highly successful companies,” Berg added. “This is why we are focusing on this sector and will also be launching new solutions in this area in 2016.”