German banks are set to discontinue their PayPal competitor, Giropay/Paydirekt, in favor of supporting the continent-wide startup, the European Payments Initiative (EPI).
Launched in 2015, Paydirekt combined the Giropay online payment system and was a collaborative effort by major German banks, including Commerzbank, comdirect, Deutsche Bank, HypoVereinsbank, Postbank, and the Sparkassen finance group. Reports indicate that both Paydirekt and Giropay will be phased out at a shareholder meeting scheduled for this week. A spokesman confirmed to local paper Finanz-szene that discussions are currently underway regarding the future of Giropay and Paydirekt GmbH as an operating entity.
These plans to discontinue Paydirekt come just before the launch of Wero, the payment wallet associated with the bank-supported EPI. Initially backed by 31 prominent Eurozone banks along with acquirers Worldline and Nets, the EPI aims to establish a unified pan-European payment system. This includes developing a digital wallet to facilitate account-to-account instant peer-to-peer and consumer-to-business payments, with future plans for online, mobile shopping, and point-of-sale payments.
While Commerzbank and DZ Bank have withdrawn from the initiative, Deutsche Bank continues to hold shares, and the rollout plans currently target Belgium, France, and Germany, followed by the Netherlands. Observers believe that with Wero’s impending launch, stakeholders in Paydirekt recognized that the new offering would further diminish Paydirekt’s viability, particularly in a cash-sensitive German market where it has struggled to gain acceptance.