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German banks to shut down PayPal competitor Paydirekt

German banks to shut down PayPal competitor Paydirekt

German banks are set shut down their PayPal competitor Giropay/Paydirekt and instead throw their weight behind continent-wide startup the European Payments Initiative (EPI).

Launched in 2015 and merged the Giropay online payment system, Paydirekt is a joint mobile and online payments initiative of the major German banks including Commerzbank, comdirect, Deutsche Bank, HypoVereinsbank, Postbank, and the Sparkassen finance group.

It is understood that both Paydirekt and Giropay will be abandoned by the banks at a shareholder meeting this week.

“There are currently coordinations at shareholder level on the future of Giropay and Paydirekt GmbH as an operating company,” a spokesman confirmed to local paper Finanz-szene.

The plans to stop Paydirekt come immediately before the launch of Wero, the payment wallet of the bank-backed EPI.

Initially backed by 31 major Eurozone banks and acquirers Worldline and Nets, the EPI has set itself the goal of building a unified pan-European payment system, offering a digital wallet, initially to support account-to-account based instant P2P and consumer-to-business payments, followed by online and mobile shopping payments and then point-of-sale payments.

Although Commerzbank and DZ Bank pulled out of the venture, Deutsche Bank remains a shareholder and the launch plans include deployment in Belgium, France, and Germany, followed by the Netherlands.

With Wero finally materialising, Paydirekt stakeholders and market observer are understood to have felt that the upcoming launch would have further undermined Paydirekt, which has failed to generate sufficient uptake in the cash-conscious German market.

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