The fundamental question whether or not messaging services such as WhatsApp, Snapchat, Facebook Messenger, or all the other many messaging services, offer commercial potential can be answered quickly with one look at the situation abroad. The answer is yes - approximately 30 percent of the roughly 900 million active users of the Chinese Messenger service WeChat use it to move money, either among each other, to pay online or to pay for their grocery shopping at the supermarket. Add to that, services such as paid content or the endless “mini-programs” - these are little applications by third-parties within the Messenger with a WeChat pay connection. This fact has already helped the messaging service system industry to surpass other digital payment systems such as Apple Pay, but in particular the “classic” payment systems cash or debit card in China. So fundamentally, you can say, yes, it works.
Of course, you can’t just paint Germany with the same broad brush as you would the Chinese market, and in many aspects the situation in Germany is quite different. These differences include: an established culture of paying cash or by debit card in Germany, privacy laws, the general fear of digital money transactions and also the strong position of banks here, which are successfully blocking the introduction of Apple Pay in Germany by exerting control over the payment periphery in the retail sector. Then there is also the rather sluggish pace of innovation by German corporations in integrating such systems.
The good news is that the obstacles are tumbling, user behavior is changing, and this is true for all target groups, not only the ominous Millennials who are transforming into customers with rapid purchasing power. This is reflected not only in design trends such as “Conversational User Interface”, “Lean UX or “No User Interface”, but also in the boost for the introduction of voice recognition systems or in all the hype about Chatbots.
Since the reach of those services in Germany is already excellent, it is only natural to use them for direct communication with customers.
The Payment Service Directive (PSD2) passed by the Bundestag (German Parliament) has resulted in an expansive opening of banking interfaces to third-party service providers, and will also be fertile ground for new applications with direct access to money transactions.
These are strong indicators that the commercial potential this channel offers will be developed more forcefully in the future, even in Germany. Whether or not this will be on WhatsApp is an open question, since in contrast to WeChat or Facebook’s Messenger, the interfaces for integrations are not available to a sufficient degree.
Everyone who evaluates if and when one should invest in this distribution channel must also ponder a host of questions about themselves and their cases: What are concrete objectives that are linked to this kind of communication? Which application might help me reach my target group? Is integration possible there? Will I be able to develop a scalable infrastructure that allows me to communicate at such a personal level at such enormously short response times that can ideally be implemented independently of services? Does my brand enjoy trust from users that would allow them to transfer money via such an informal means of communication? Do I have to involve a financial institution partner like a bank that already has that kind of trust? Above all, the question that needs answered first is how to establish the communication with the customer individually and in a contextually meaningful way. To be concrete, how does a company get into a Group Chat in WhatsApp where it can sell its services in a way that fits well into the conversation at hand?
There are good answers to these questions in many cases, and you can expect substantial potential for this distribution channel in the future. Personally, I am convinced that in the next few years we will come to see more transactions via Chat. As is so often the case, it only takes some initial success stories to trigger a wave of implementations.