Paydirekt After One Year
This translation was generated automatically.
Ask Paydirekt—or its marketing-heavy champion, Sparkasse—what this is all about and you get this answer:
@nickoffff paydirekt follows German security and data-protection standards. — Sparkasse, August 19, 2016
Paydirekt positioned itself against PayPal, although the much more appropriate comparison would have been Sofortüberweisung. For reasons I can’t understand, PayPal’s reputation in Germany is much worse, making it an easier target. Perhaps that comes from old wives’ tales about eBay scammers being protected by PayPal. That has surely happened, but it isn’t the norm. At least in my last ten years, I’ve had no problems with PayPal as either a private buyer or a business seller.
Privacy: If German consumers actually cared about it as a problem, Facebook would be a wasteland in Germany. Instead, the (likeable) startup from California has to answer to the minister (rightly!) because so many idiots hang out there.
During the Olympic broadcasts from Rio, Sparkasse ran these ads:
The absurd message: You’re throwing your money out the window on junk online? Then pay with us; at least that’s safe.
The danger implied by those ads doesn’t really exist. PayPal, to stick with the chosen competitor, reimburses the full amount for account abuse that wasn’t caused by gross negligence. Someone who types their password into the first phishing email they see would do the same if the phishing targeted Paydirekt. Every payment provider makes mistakes, no doubt. If Paydirekt had handled hundreds of transactions per second for ten years like PayPal, it wouldn’t take long to find horror stories.
In fact, Sofort is the service to criticize here: it logs into the customer’s online banking on their behalf and gets full access to all transactions, balances, and personal information. It seems to work “securely” in practice, but the aftertaste is too unpleasant for me; I removed Sofort from my shop. Courts consider Sofort a common payment method, but I advise caution about entering TANs on websites that don’t belong to your bank.
Security! Where does buyer protection apply with Paydirekt? The restrictions are surprisingly similar to PayPal’s: virtual goods are excluded. No protection for Smurfberries. What about fraud in practice? Since there have been so few transactions, there are no Paydirekt user reports yet. And if your slogan says “secure” loudly enough, hackers will target you once you become popular.
Buyer protection: If the goods aren’t shipped, don’t worry! With paydirekt you enjoy full buyer protection. Simply tell us about the issue in your customer area and we’ll take care of it. In such cases, you’ll receive a full refund of the purchase price and shipping costs for shippable goods.
Sofort charges extra for protection, because the concept is simply a bank transfer in advance, which doesn’t come with protection from anyone.
To avoid giving the wrong impression: I’m not defending PayPal or Sofort. Their fees are too high, and their interfaces and APIs are—or at least were for a long time—terrible. But they have a huge advantage: almost every German online shop, no matter how exotic, accepts at least one of them. And don’t bring up privacy. Facebook already knows what I bought, because I probably chatted about it with its unencrypted bot or ran into one of its buttons.
What else is there? Oh, right: Barzahlen.de. The idea is to use supermarket checkouts as bank counters and let customers pay in cash, almost anonymously. It seems popular with N26, the (likeable) Berlin fintech startup, which wants to save on ATM fees. If only it didn’t fail at the Rewe checkout. One listener who runs an online shop told me Barzahlen.de works very well for him: it’s a head shop, selling accessories for cannabis and other smoking products. Would those customers happily pay with Paydirekt?
The failures on the merchant side are well documented by now. There’s no self-service sign-up (it goes through your bank, presumably involving fax machines), there are no prices you can view in advance (you have to negotiate separately with every bank), and insiders say the prices are higher than the competition. I’ll have integrated the PayPal cart on my site long before I voluntarily call a bank adviser, let alone a dozen of them.
Plugins for the popular shop systems are essential to small shops. Paydirekt lets a third party charge a licence fee for them. Stripe shows how to do this: its documentation includes code snippets with valid test keys that show how payments work. You can paste them into a terminal and see whether it works for your own shop.
You can tease Paydirekt on Twitter, but that amusement won’t solve the problems for long.
@paydirekt I’m setting up a new Shopware shop. Where can I download the Paydirekt plugin, and where are the API keys in your portal? — Timo Hetzel, November 25, 2015
The result after one year of Paydirekt: Sparkasse’s internal slides report 400 transactions. Per week. As someone aptly commented, you don’t even have to turn on a computer for that. You can do it by hand: one transfer every 20 minutes. Congratulations. PayPal handles more than 200 per second.
English has a nice expression for this situation: “throwing good money after bad”. Apparently, at least €100 million has already been sunk into Paydirekt. Many more millions will be needed to keep it alive for a few more years. Then the whole thing will be shut down with a shrug or left in a corner like an unwanted toy, like GeldKarte and GiroPay, the other failed attempts by German banks to move beyond paper transfer slips.
I strongly recommend shutting Paydirekt down again before the Christmas shopping season. A useful alternative would be very easy to implement by then, and PayPal and Sofort would barely make a cent in Germany in 2017.
Tomorrow, in part two of this post, we’ll think about the actual goal (which Paydirekt seems to have lost sight of in some meeting) and what the system should look like.