Wirecard AG, the German financial technology firm whose market capitalization has overtaken that of Commerzbank AG and Deutsche Bank AG, has set its sights on commerce done through voice-activated devices such as Amazon.com Inc.'s Alexa.
According to CEO Markus Braun, Wirecard will also experiment with offering instant credit, insurance and so-called individualized pricing to customers whose data it can access. Speaking at a conference in London on Oct 10, he also revealed a new set of targets for the company, which also owns a fully licensed bank, Wirecard Bank AG.
"In the next five to ten years we will see huge additional growth by the point-of-sale moving into the digital ecosystem," he said — in other words, transactions that are currently made by connecting a payment card to a card-reading machine would become entirely digitized, eliminating both physical objects.
"We see a new upcoming sales channel: it's voice commerce," he added, pointing to purchases made via voice-activated devices such as the Amazon Echo, Google Home, Facebook Portal or the iPhone's Siri app.
"The opportunity for us is in the partnership approach, to win the companies that are coming up with the smart devices and to provide them with a payment point," he said.
Harvesting customer data
Additionally, Wirecard, which is based in Aschheim, near Munich, will harvest and analyze customer data such as search history, mobile phone location and credit history in order to help physical merchants increase sales. Braun gave the example of a woman looking up a handbag on the internet.
"A customer that has already searched online for a product — in this case a handbag — is near to a store that is offering the handbag, and because it is a seamless integration of the sales channels, the store can send the customer, via the mobile app, an alert, saying, 'You can get this bag that you searched for, now, in store.'"
A discount or a markup could also be applied to the price charged to that particular customer, Braun said — a method called dynamic pricing.
Braun went further, saying that biometric scanning machines in stores could allow for payments to be taken automatically, without the need for a teller, while a loan for buying the product and theft insurance could be instantly written by a bank.
"We are not a payment platform anymore. We see our mission as a commerce-enabling platform," he said, noting that Wirecard is already licensing its technology to several banks and payment companies — an activity known as white-labeling.
The firm is already working with payment giants across the world, Braun said, including Visa Inc., Mastercard Inc., Alipay, Amazon Pay, WeChat and others, and the new strategy will aim to incorporate customer data from all these companies.
The number of online searches done through voice devices is already in the billions on a daily basis, said Braun, and is set to grow in the coming years.
Transaction, revenue targets
Wirecard also issued new targets. The volume of transactions it is processing is expected to increase to €710 billion in 2025 from €215 billion in 2020, and its revenues are expected to more than triple over the same period, to €10 billion from €3 billion. Braun said the figures are "conservative" and that he expect the company to exceed them.
Wirecard has had a bumpy ride on the stock market in recent days, with its share price dropping nearly 10% on Oct. 8, the day after it joined Germany's DAX shares index, before rebounding over the ensuing days.
Braun told S&P Global Market Intelligence that he cannot comment on short-term volatility, but said "Wirecard is confident in the long-term value of its stock."
The firm has been beset by accusations of financial impropriety in acquisitions, and improper checks against money laundering, but none of the allegations have resulted in regulatory action, although it remains a favorite target for short-sellers.
On the sidelines of the conference Braun told U.S. TV station CNBC that the bank's controls have improved.