Otto online retail began offer offering instant payment this January to facilitate real-time transfers on its API programming interface, which has been developed in co-operation with the Otto Group and the Hanseatic Bank. Transfers are done in seconds regardless of Sundays or public holidays. Otto is “the first company in Germany” to provide the service, it said.
Real-time payments processing
API provides standard information processes about incoming payments online. Express payments are received and processed automatically in real time. “We are proud to be a pioneer in the industry by presenting the first practical application case. We are thus transferring real-time economics to payment transactions for the German online trade,” said Boris Jendruschewitz, Director of Group Finance at the Otto Group. Real-time transfers hold great potential e.g. for advance payments. As there is no time delay as with a conventional bank transfer, the goods are dispatched to the customer faster. In late 2018, the dispatch of Otto’s last main catalogue sealed the transformation from a former catalogue mail-order company to an online platform.
Bank transfers in digital age
Until now, it has been common practice in the banking industry to collect (online) transfers and process them at certain times. Instant payments have been possible in Europe since late 2017, but have been slow to take off as real-time transfers can only be used, if both the sender’s bank and the recipient’s bank offer the service. “First and foremost, instant payment is not a new payment system, but corrects the outdated processing of bank transfers into the digital age,” said Anke Brummack, a payment analyst at Otto.
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