Seamless Xtra’s Paula Hallentuch speaks with André Moeller, Global Head of Payments, Risk & Fraud management at Volkswagen Group Charging GmbH, better known as Elli. As part of the Volkswagen Group, Elli focuses on providing groundbreaking charging solutions for electric vehicles.
In this interview, André examine the latest e-commerce payment trends as well as the potential for both AI and localisation to enhance Europe’s payment landscape. He also consider whether in-car commerce is the next big thing?
What are the latest payment trends you are seeing in e-commerce and retail at the moment?
I’m very critical in that question because the latest trends I see in the payment industry is open banking, which is related to mostly e-commerce stuff. We at elli are doing e-commerce stuff in a very small way, but the most business we do is the charging business with our customers. There, we are the biggest network operator in Europe at the moment and we cover over 600, 000 charging points. In terms of the latest trends, many are celebrating open banking, but from my point of view I don’t see it as the holy grail, because at the end of the day, it’s a SEPA mandate.
So the first transaction is secure, but the following transactions you have a SEPA mandate, especially when we talk about our business, which is variable recurring payment, I can’t work with this because SEPA is too risky for us, because the option of the customer to set up a charge back for the last 13 months is too risky for us in the charging sessions or in such a charging environment.
I also see requests to pay for e-commerce as a trend. I know the other group is working hard on that. So if you ask me about over all latest payments trends, then it is open banking and requests to pay. But dedicated to our business there is no new payment trend which could be celebrated at this moment.
Thank you very much for your thoughts and your insights. In terms of AI and machine learning then, how do you think this technology can be used in both online and offline transactions?
I can only give the view from our side in terms of charging payments and stuff. To move it to another stage I would say how can AI and machine learning help us to identify potential fraudsters and how can it help us to protect our systems from losing money? And in that case, I can give you a real answer about online and offline retail transactions, but Ialso from my perspective, AI and machine learning will help us a lot to protect our systems from losing money to potential fraudsters.
If we step back, we start with machine learning in the last year where we bring our information to the machines to learn how they can defend with our input to reduce fraud. In that case, the next step is AI, because from my point of view, AI is based on machine learning and what we put in the machine. I’m pretty sure the fraudsters will also use this. So we are ending up competing with them as we have been doing the last few years.
In the online world, machine learning and AI is being used to identify the potential of a customer. Maybe he’s buying something and we can add on something based on what he’s buying. To take what Amazon has been doing in the last years – for instance, the say what they other customers buy this, if you buy that. That’s a good example of machine learning and I think that we can focus on this with AI.
André how do you think localisation and omnichannel payments are shaping global e-commerce?
Localisation will be very important, I think. We as Elli are obvisouly focused on Europe, so in that case, from my point of view, I see big potential for localised stuff and localised payments because many of our dedicated countries are setting up localised payment methods against the big U. S. Brands like PayPal, Visa, MasterCard. So in that case, we have some initiatives, for example, in Germany, which is pay direct or zero pay, or we have EPS in Austria or iDEAL in the Netherlands, which is now part of the EPI, the European Payment Initiative.
On the local side, you will have some need of the customers, which you have for Swish in Sweden or Vipps in the Scandanavian countries, for example. These are starting to look like a good solution because they identify the need of the customers, bring everybody to the table and set up something bank wise for the customers. So they are starting with the customer view, and then set up something for the customer, which reduces the potential impact of the U S brands. In Germany and also in the rest of Europe, we set up localised payment methods coming from the payment, not from the view of the customer. So in that case, if you set up a localised or omni channel payment methods, thinking about what the customers need and thinking about what the merchant also needs.
For example, my wife is always using PayPal for online transactions. And at a point of sale, she is always using Girocard. Girocard is linked to our household account and she uses PayPal because it’s safe, secure and she can pay in 30 days. So there is no need to use other online payment methoids. There is no need to use on a PUS account to account. In that case, we have good localised Payment methods in the European region. Take them, bring them together and roll them out over Europe because you have a identified a big customer base that can use this. You can bring this to the merchant and say we have something here, it’s based in Switzerland, it’s based in the Nordics, but we can grow them. So VIPPs, for example, started in Norway and now they now have localised the whole Scandinavian region, except Sweden. But Sweden will be also covered very soon. So they are rolling out the payment over Europe, but they’re starting with a localised base.
Thank you André. Now looking ahead, do you think in-car commerce is the next big thing?
So we as Volkswagen Group Charging don’t use in-car commerce payments yet because if you’re talking about the car, which is related to in-car payments, you have to talk to the manufacturer like Volkswagen or Audi. We as Volkswagen Group Charging are outside of the car because we do all the charging related stuff.
So, in-car payments could be a potential new way in the future if you are coming from the customer point of view. So for example, Mercedes rolled out their in-car payments recenty where they give the opportunity to pay for parking and charging in the car. So, my question is where’s the need? When we’re talking about in-car payments and looking to the future, I think it brings us better together if we see the customer first. So as a cutomer I spend 95 percent of my time working from home. My car is sitting still in the car park and I don’t use my car too often.
So if my future car has in-car payments, I can book the car park but I don’t need it. I can do the charging which I need if I don’t charge my car at home. Then thinking about it some more, I may use may car when I go with my kids and family to Spain for holidays. So there I need a car and my electric vehicle stuff. So. In that case, you can already calculate by the car when you have to charge your car. So, the space beside the highway, or the gas station I can know exactly on the minute when I will arrived there.
In that case, it gives me the opportunity on the way, for example, to order a coffee, paid over the in-car payment system. So then when I’ve parked and I am walking down to the store to grab my coffee with my kid on my hand and I need to add something I don’t need my cell phone or credit card because I’m can just say to the guy, put it on the bill. And here we have a circle of in-car payment. I think that’s my assumption.
And I would love to use something like that. From a charging point of view, we will have a bridge in the future, which is plug and charge, which should be related to in-car payments, but it could be also related to the account of the customer, which is in the app.
André, that’s certainly a lot of food for thought, I would say, especially for some things we might see in the fuure. Thank you very much for your time and I’m looking forward to seeing you and meeting you at Seamless Europe this year.
