The Cash Comeback

Paying for online purchases from retailers in cash? The Berlin-based fintech is creating a new cash infrastructure, and is gaining increasing numbers of companies and users. The company is now expanding in Europe.

It was a silent revolution. In spring 2013, the public utility of the German town of Dusseldorf closed down all the ATMs in its customer centers. From that point on, customers wishing to pay their energy bills in cash would be able to do so at more than 40 retail stores in the Dusseldorf area. This saved customers travel time, and saved the public utilities money – thousands of their invoices are still settled in cash each year.

The building-based start-up now handles all cash transactions. This fintech, which had previously been a payment service provider for online shops, became a supplier of a comprehensive cash infrastructure, and is now targeting companies with mass customer business, such as retail groups. This initiative is breathing new life into the payment market in Germany – and will soon be doing so in Europe as well.

“We founded in 2011 while we were
still at college,” recalls Sebastian Seifert, one of the founders. They noticed that many customers cancel their online purchase while selecting the payment type, while at the same time – according to Deutsche Bundesbank – 80% of all transactions in Germany are settled in cash, just not online. “That bugged us so much that we had to take on the digitalization of cash,” with the premise of being much cheaper than cash deposits with general and savings banks.

Even a 26-year-old like me won’t live to see the day when cash is not king.

Sebastian Seifert, co-founder of

Once the method had been accepted, banks came into play.

The Concept: Just Scan In

The founders are working on a simple concept: customers who buy online receive a payment slip by email, SMS or post, including a barcode. They then present this barcode at the checkout in the supermarket. There, it is scanned, and the customer pays with cash. The checkout system notifies the online shop about payment, and the shop then sends the ordered goods to the customer.

Who are the customers? Some are well-off internet shoppers, who have security concerns and do not like to provide their account deals online. On the other hand, there are also low-income groups who use cash in order to retain control over their expenditure. “Taxi drivers, waiters and sales staff often withdraw their money at the beginning of the month, so they can always see how much they have left,” reports Seifert. “And many of them buy online because it’s cheaper. But they don’t have a credit card and cannot pay on invoice or by PayPal.”

Once many customers and retailers have accepted the method, banks came into play. “Why don’t we offer our cash infrastructure to those who need it most?” Seifert adds. In order to prove that this can work, Barzahlen started a use case with the fintech N26, a direct bank that specializes in account management via smartphone.

Growth in Many Industries

Step-by-step, Barzahlen is opening up new sectors such as insurance and telecommunications, as well as claims management services. Its customers include regional and national energy suppliers, as well as over 7,500 online retailers Around 700 companies from 10 different industries use it.

At the end of 2015, Barzahlen presented its solution for depositing and paying out cash on a separate giro account. A partner bank provides the service, and customers from any bank can now deposit or withdraw cash when they make purchases, and make use of retail opening hours. The retail network comprises around 10,000 stores, through which half a million end customers pay their phone bills, insurance, or rent at the checkout. “Customers want simple banking services to be available at the place where they are going anyway,” believes Seifert, adding: “That’s why retail stores will increasingly take over this job.”

Now it’s time to step into international operations: This initiative will start in Austria and Switzerland, then the focus will be on Southern and Eastern Europe, and Seifert is certain that the business will last a long time. After all, digital payment transactions are on the rise, and the use of cash is declining – although significantly more slowly than thought, says the founder. “Even a 26-year-old like me won’t live to see the day when cash is not king.”


Trend Report Digitalization

Further information on the fintech and its business model is available in an article in our current Trend Report.