Deutsche Bank Eyes Growing Payments Unit With Takeovers, JV’s

Deutsche Bank is looking to acquire firms or enter into joint ventures with other companies in a bid to become a significant player in Europe’s digital payments market, the Financial Times reported Sunday (Nov. 22).

“Digital payments are one area with the highest strategic priority for us,” Stefan Hoops, head of the German financial services giant’s corporate bank, told the Financial Times, according to the paper, adding: “Non-organic growth is clearly an option . . . If an opportunity comes along we would clearly consider (it).”

The Financial Times further quoted Hoops as having said a potential acquisition could be “a small payments processing company that is … struggling to meet tighter regulatory demands.” Another option would be to enter into a joint venture “with someone who is big (elsewhere), but not that present in Europe.”

In addition to seeking ways to use deals to build digital payments market share, Deutsche Bank also has been hiring top talent from the sector, the Financial Times noted. The paper listed recent hires as having included FinTech entrepreneur André Bajorat and Kilian Thalhammer, a former senior executive at Wirecard.

Deutsche Bank’s renewed interest in the payments sector —  it sold its payments operation in 2012 to a buyer in the United States — comes as corporate customers have become increasingly eager to receive funds quickly.

Vikram Dewan, chief information officer at Deutsche Bank’s corporate banking division, told PYMNTS in August that the days when businesses would wait days for payments without complaint are over.

“The Johns and Marys of the world are even more demanding than the Siemens and the GEs,” he said. “Corporations obviously have a more complex infrastructure, but even they are wanting to [transact] more and more like consumers.”

The demand for instant payments is expected to continue to grow. For example, the payments-as-a-service sector is forecast to reach $16.7 billion by 2024.