Seeing an opening after the shuttering of Paydirekt last year, German payment solutions provider Unzer is introducing Unzer Direct Bank Transfer, a pay-by-bank service and the first product in its collaboration with Mastercard.
The new service leverages open banking to offer what Unzer hopes will be a simple payment experience, using existing bank authentication methods such as biometric verification. Currently available only to merchants in Germany, it is designed to work across all SEPA countries. Unzer plans to expand into additional European markets later this year.
Additionally, Unzer will offer a white-label option, allowing merchants to customize the checkout process to match their branding.
Changes to the Competition
Unzer is positioning its product as a replacement for Paydirekt, the German initiative launched in 2015 as Europe’s answer to PayPal. Owned by a consortium of German banks, Paydirekt shut down in June 2024 after being overtaken by the European Payments Initiative (EPI), which is backed by the European Central Bank. EPI’s stated goal is to build a unified payment system for Europe, featuring a digital wallet that supports account-to-account instant P2P and consumer-to-business payments, with plans for online, mobile, and point-of-sale transactions.
That’s a retrenchment from its original plans. When it first launched, EPI aimed to offer credit cards and position itself as a rival to Visa and Mastercard. However, it scaled back after more than half of its member banks withdrew from the project in 2022. The fact that Unzer is now teaming up with Mastercard illustrates how difficult it is for a European entity to overtake these payment giants.
That said, it remains to be seen how much of a market there is for a new open banking solution in Europe. Paydirekt’s flagship service, Giropay, never really caught on. According to data from the EHI Retail Institute, Giropay commanded just 1.2% of all online payments, even within Germany.
Another potential rival in the open banking space, Sofort, was integrated into Klarna last year, meaning Unzer will now face competition from the Swedish fintech. The competitive advantage here lies in simplicity. To use Klarna, end customers must install its app, but Unzer hopes they will find the open banking rails provided by Mastercard easier and more straightforward to use.
