The Distillery #5: Vodafone-led Partnership to Launch Pay by Bank in Germany

May 2025

Telecoms & Connectivity

Juniper Research

Analyst House

In this edition:

• Vodafone is launching Pay by Bank in Germany — here’s why it could transform mobile payments.
• mPOS and Soft POS are booming — here's three trends set to drive vendor success in 2025.
• US EV incentives hit the brakes — what recent policy shifts mean for the future of the clean vehicle market.
• Our latest insights on Klarna, OTP revenues, Capital One x Discover, and mobile ARPU.

TELECOMS & CONNECTIVITY

Vodafone Partners with Tink & Ayden for Pay by Bank in Germany

Vodafone just teamed up with Tink, a subsidiary of Visa, and Ayden to roll out a Pay by Bank feature for mobile users in Germany. Instead of using card details, subscribers can pay directly from their bank account for digital purchases; a process powered by Open Banking.

Crucially, these payments won’t be processed like regular card transactions. Strong Customer Authentication (SCA) will apply, likely using MFA tools like one-time passwords sent via text or mobile network APIs.

Distilled...

🟣 Open Banking always refers to the most up-to-date payment information, providing greater protection against fraud. By implementing these disruptive payment channels, network operators such as Vodafone can better position themselves as leading digital players beyond traditional connectivity services.

🟣 Pay by Bank offers a serious upgrade from Direct Carrier Billing (DCB), which has long been operators’ go-to for mobile payments. DCB is clunky by comparison — and doesn’t offer the same fraud protections or user control.

🟣 Our latest data has DCB facilitating $7 billion worth of transactions in Germany this year; a substantial volume that brings equally substantial transaction fees. By shifting users to Pay by Bank, which involves fewer intermediaries, operators like Vodafone can cut those costs and capture more value.

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FINTECH & PAYMENTS

Insider: mPOS & Soft POS Trends to Watch in 2025

Mobile and software-based POS solutions aren’t just replacing traditional terminals; they’re transforming how merchants operate, compete, and scale. To celebrate the release of our latest research on the subject, here’s an exclusive look at three trends driving this evolution — and shaping POS vendors' strategies.

🟣 Apple’s move to open up third-party apps is a game-changer for Soft POS. By breaking down previous barriers, it’s unlocking a wider ecosystem of Soft POS solutions, sparking fierce competition and a wave of innovation across the industry.

🟣 Merchant demand is soaring, pushing POS providers to scale with modular, customisable features. The winners will be those investing early in smart integrations - think AI-powered inventory management, CRM, and analytics - offering merchants tailored solutions and valuable upsell opportunities.

🟣 Growth is accelerating in emerging regions like the Indian Subcontinent and Asia Pacific, where SMEs are the biggest adopters of mPOS and Soft POS. This expansion is fuelled by rising smartphone use, financial inclusion initiatives, and government pushes toward cashless economies.

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SUSTAINABILITY & SMART CITIES

US EV Market Takes a Hit as GOP Cuts Incentives & Standards

Last week, House Republicans passed the “One Big Beautiful Bill Act,” a sweeping tax and spending package that eliminates Biden-era clean energy incentives, including the $7,500 tax credit for new EV purchases. EV owners would also face a new annual $250 tax, while hybrid drivers would pay $100.

At the same time, the US Senate voted to end California’s longstanding right to set its own vehicle emissions standards. This decision could derail the state’s plan to require all-electric new car sales by 2035. With over 15 other states, including New York, Colorado, and Washington, following California’s lead, the impact could be nationwide.

Distilled…

🟣 Scrapping tax credits could hand Chinese EV brands like BYD a bigger foothold in the US. They've seemingly mastered low-cost production, and without the $7,500 credit, price-sensitive US buyers may look abroad. Our data shows that EV ownership in the US grew 46% from 2023 to 2024 — proof, if any were needed, that incentives work.

🟣 The bill’s flat annual tax also increases ownership costs for both new and existing EV and hybrid drivers. Unlike the fuel-based tax paid by internal combustion engine (ICE) vehicle owners, this flat fee applies regardless of how much the vehicle is driven; a method widely regarded by experts as regressive and unfair.

🟣 A single national emissions standard may simplify compliance in the long run, but it comes at a high cost. It undermines California’s historic leadership in clean car policies and risks stalling progress in the country’s largest and most influential vehicle market.

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ICYMI

Signal Boost

Every issue, we highlight the research, blogs, infographics, and insights we're especially proud of.

📉 Klarna’s latest losses have sparked rumours that the company is on the verge of collapse. But the truth is (unsurprisingly) more complex than TikTok would have you believe.

🔐 Revenue from one-time passwords (OTPs) sent via OTT messaging apps is set to soar 600% by 2029, as businesses shift from traditional SMS to encrypted channels like WhatsApp and Viber.

💳 Capital One’s acquisition of Discover could spark a major shift in the US payments market. How does this raise the stakes — not just for credit cards, but for the future of how we pay?

📱 And finally, mobile operators live and die by Average Revenue Per User (ARPU). Which countries will deliver the highest returns in 2025 — and what actually influences ARPU?

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