IT Field of Competence Disruption: Reference Story Barzahlen
The Digitalization of Cash
In 2011 Barzahlen’s founders began to make cash payments available for online purchases. As of today one can pay at more than 8.000 online shops with cash. And there is even more to that: Electricity bills, insurances or rent can also be paid with cash over the Barzahlen retail partner network. Recently, the Berlin start-up introduced a banking solution which allows customers to withdraw cash easily via mobile app at retail stores.
The hot media topic of today is FinTech – young companies which are changing the financial sector. Currently, there are approximately 200 enterprises dedicated to the financial matter. Barzahlen started as a pioneer. “When Barzahlen was founded, the term ‚FinTech‘ was still unknown in Germany. We were doing ‚Payment‘”, company spokesperson Susanne Krehl explains.
Yet Barzahlen is not an ordinary FinTech since it is dealing with the most popular mean of payment in Germany: Cash. “About 80 percent of all transactions in Germany are made in cash. And only one third of all adults in Germany owns a credit card”, Barzahlen analysed. Having this in mind, the founders started with their business idea “Barzahlen”. They wanted to offer an online payment option that is accessible for everyone. Hence, they started bringing cash online.
Retail partners provide the infrastructure
With the help of retail partners Barzahlen created an infrastructure that makes cash payments and cash pay-outs possible at supermarkets, drugstore chains and other nationwide retail partner stores. The network includes roughly 10.000 REWE, Penny, dm, Budni and real,- stores as well as Telekom, mobilcom-debitel and Unternehmensgruppe Dr. Eckert stores. At the end of the ordering process customers receive a payment slip that they can print out or that can be sent to their mobile phone as a text message. Afterwards the payment slip is scanned and paid with cash or any electronic payment method at one of the numerous retail partners. In real-time, the online shop will be notified and will receive a payment confirmation so that the shop can dispatch the goods without any risk.
By now, more than 8.000 online shops are using the payment solution offered by Barzahlen. Besides e-commerce, Barzahlen recognised the huge missed potential in other fields. Energy suppliers were giving their customers the option to pay their bills with cash at their service centers. Now, in cooperation with Barzahlen, utility companies as well as many other billers offer to pay bills at the nearest supermarkets. Next to utility companies such as E.ON, insurance companies such as ERGO Direkt, telecommunication companies like Deutsche Telekom and also housing companies e.g. GAG are cooperating with Barzahlen.
Next objective: Banks
Now Barzahlen focuses on banks. Customers are offered the possibility to withdraw cash via their banking-app at one of Barzahlen’s retail partner stores. One of the pioneers who have successfully integrated Barzahlen is Deutsche Kreditbank (DKB). According to Barzahlen there will be many more banks following this example.
With roughly 10.000 stores Barzahlen offers a network that is bigger than any of Germany’s private bank branch networks. In fact, the Barzahlen network is still growing whereas banks are reducing the number of their branches: According to KfW more than 12 percent of branches have been shut down within the past 10 years. In addition, further closure is expected. By 2020 most likely one third of all branches will have shut down. Barzahlen plans to counteract this development by offering simple banking services such as withdrawing cash and settling invoices at retail stores close by.
Photo: Achim Bönsch und Sebastian Seifert, founders Barzahlen – © Cash Payment Solutions GmbH
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