Payments


Wild West investors, Berentzen says that Commerzbank’s foray into fintech has been characterised by caution and careful planning. “Commerzbank identified the business potential of API technology early, and leveraged internally first,” he explains. “Then we opened-up step-by- step to connect with others and to participate in the ecosystem game. Technology, paired with customer- centric thinking, were key for us.” Certainly, look at what Commerzbank has going and this focus on clients shines through. That starts with the bank’s Corporate Payments API. Apart from letting businesses transfer payments directly out of their own enterprise resource planning (ERP) systems, it also helps them receive status information in return. The same principles apply to the bank’s Instant Payments API, which allows clients to submit payment orders and get confirmation messages almost instantly, particularly useful for businesses where speed is of the essence. At the same time, both the Instant Payments and Corporate Payments systems include automated data transfer processes and seamless integration with third-party platforms – with the ultimate aim of making payments cheaper, simpler and more effective. That’s true for the clients themselves, of course, but Berentzen is keen to emphasise the benefits of his APIs to his employer too. For one thing, seamless service boosts the number of payments done via Commerzbank. For another, it keeps customers happy. Combined with a reduction in the time staff spend dealing with data inconsistencies, the bane of manual file transfers everywhere, and no wonder Berentzen says that automation comes with “mutual benefits” for everyone involved. Given all the advantages of APIs, indeed, it makes sense that many other banks are hopping aboard. In London, for instance, Barclays is developing a host of different platforms, covering everything from accounts to transactions. Across the Channel, meanwhile, ING has tested an API that lets customers see the status of their bank guarantees in real time. All this is shadowed by broader developments in how payments are done. A prime example here is Banco Sabadell, which recently announced that it would soon let business customers make payments from its website – even while using accounts held in other financial institutions. Whatever the specifics, collaboration with fintech is the watchword here, with many banks using PSD2 to offer data up to improve their own offerings. Indeed, banks are also increasingly happy to work with external partners in a number of areas. Last year, for example, Deutsche Bank announced a major deal with Airwallex, an Australian payments firm. Among other things, Airwallex plans to use the German bank’s foreign exchange services and integrate them via an API into its own offering. All the same, admits Berentzen, this same spirit has


Future Banking / www.nsbanking.com


Value of global digital payment transactions Digital commerce


$8T $6T $4T $2T 0 2017 2018 2019 2020 2021e 2022e 2023e Source: Statista


struggled to permeate between rival banks. A major difficulty, he says, is the “lack of standards in API development” that can make it hard for companies to integrate into wildly different platforms.


Banking on it Commerzbank, however, is battling to make things simpler. By working through the so-called Berlin Group – a collection of around 40 European financial institutions – Berentzen and his team hope to promote greater API standardisation. Other challenges are on his radar too. With fraud a constant danger, he says that improved infrastructure monitoring is helping keep payments safe. That’s bolstered, he adds, by better technology. One solution is to promote state-of-the-art workflow authorisations. Another is using payment order approvals like PhotoTAN. Designed by Commerzbank, it involves scanning a special coloured graphic with a smartphone app or specialised reader. For Berentzen, this sort of wizardry isn’t just important for customers, it’s absolutely vital to Commerzbank’s reputation. As he puts it: “Customer trust is the biggest asset of a bank, as well as a key differentiator to other payment providers.” With so much activity, what might the future of banking payments look like? Berentzen, for his part, is optimistic. Once again pointing to the power of the market, he suggests that payments are likely to become increasingly more request-based and on demand. That’s true, he adds, even for corporate banking. Though it’s traditionally been less polished than its retail cousin, developments like Commerzbank’s Corporate Payments API speak to a world where businesses can make payments easily and comfortably. What is certain at any rate is that we’ll soon be as far, technically speaking anyway, from that ancient world of credit cards as the 1980s was from the banche of Siena and Pisa. About time too. ●


$3.2 $3.6 $4.1 $4.8 $5.4 $6.1 $6.7


Mobile POS payments


14% Paymentology 39


The surge of global non-cash transactions from 2018 to 2019, reaching over 700 billion transactions, the highest growth rate recorded in the past decade.


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