German retail group Otto is allowing customers to make instant online payments through a new partnership with one of the country’s major banks.
Using the new API, developed by the retailer alongside Hanseatic Bank, money can be transferred within a few seconds rather than several days for goods on the websites of Otto brands.
Otto worked with Hanseatic Bank on the service, which as with other online payments requires the user to fill out a form with the recipient, IBAN, amount and purpose. The customer receives a confirmation that the transfer has been completed within one minute.
"Instant Payment is not primarily a new payment system, but corrects the outdated processing of bank transfers in the digital age," said Anke Brummack, payments analyst at Otto.
As well as enabling faster retail, Otto said in a blog that the technology could enable instant activation of subscription services or insurance.
The need for a standard for real-time payments is on the agenda of EU lawmakers. In November, the European Central Bank unveiled its pan-Eurozone system, called Target Instant Payments Settlement (TIPS).
The service is expected to eventually be available across the whole of the Eurozone, but has launched initially in France, Germany and Spain.
It uses central bank money to settle individual payments in less than 10 seconds.
Otto is a Top_50 retailer in InternetRetailing’s IREU Top500, with subsidiaries including the likes of bonprix and Baumarkt direct. Read our most recent report here.