German retail giant Otto Group is shutting down its Yapital mobile payments business, blaming a competitive market and weak consumer take up.
Launched in 2011, Yapital used QR codes to let people make instore and online payments and pay bills through their mobile phones.
However, despite claiming that the service was popular with retailers, the Otto Group has given up on attracting consumers and will shut it down on 31 January, although Yapital will remain active as an e-money institution in the business-to-business market.
Marc Berg, executive director, Yapital, says: "At the moment it is simply impossible to forecast business performance in this segment accurately - and above all, the development of the number of end-consumers. While we were already talking about the mobile-payment breakthrough three years ago, today studies indicate there are currently only 200,000 users in Germany."
In addition to blaming the slow pace of consumer adoption, Berg says that margins have been falling thanks to new interchange regulations.
The firm's Hamburg base is being shut down, with headcount "reduced significantly," says a statement. German publication Die Welt puts the number of job losses at around 100.
Says Berg: "We were optimistic to the end, but ultimately things did not work out. We always knew we had to solve the ‘chicken or egg’ issue to be successful. Unfortunately we were only able to solve one side of the equation: acquiring strong and attractive retail partners."