Stepping up the pace for innovative payments: a strategic challenge for BNP Paribas
11.10.2021 | Group
Speed, fluidity and security are the key words for the customer experience when it comes to payment. Fintechs have often distinguished themselves in the first two areas, while traditional banks have maintained their competitive advantage on security, a key aspect in the bond of trust with their customers. It is unlikely that the pace of transformation brought about by the Covid-19 crisis in this area slows down.
A European ambition
The European Payment Initiative (EPI) sets the European ambitions: to counter the supremacy of Visa, Mastercard and GAFAM* giants in the field of payments. While consumers and merchants will have a unified pan-European payment solution in 2022, many advances have already improved their digital lives. “This is true for individuals as well as for merchants, for whom the issue is critical both for their business and for their turnover,” says Neil Pein, Global Head of Axepta BNP Paribas Group and Head of Payments Transformation for the BNP Paribas Group.
Instantaneousness is the name of the game
The notion of instantaneousness guides innovations in the service of consumer experiences. Transfers between bank accounts were one of the first beneficiaries. Instant transfers are increasingly used by BNP Paribas customers - almost one in ten today. For credit card payments, the contactless limit was raised from 30 to 50 euros... before the biometric card removes the limit completely (up to each customer’s personal limit). This card, which will be offered on the market for the first time by BNP Paribas in 2021, will enable payments of more than 50 euros in shops to be validated by a fingerprint.
For Internet purchases, it is the dynamic cryptogram card which provides additional security. The three numbers on the back of the card change every hour, a tried and tested innovation introduced in 2019.
Innovations relating to payments are also being made for smartphones. From Apple Pay for iPhones to PayLib for Android, BNP Paribas’ credit cards are being dematerialised in mobile phones. Dedicated applications such as Lyf Pay also allow payments in certain stores, click & collect, as well as associated services such as loyalty cards, vouchers or online kitties. For wearers of connected watches, Fitbit Pay or Garmin Pay enables payment using the watch’s pin code up to the payment limit of the registered bank card.
The service Paylib between friends enables you to send money to your friends, relatives, family etc. very simply, thanks to a telephone number, instantly, irrespective of the recipients bank, directly into his or her bank account.
Among the areas favoured by neo-banks in recent years, international transfers are now receiving attention from “traditional” institutions. BNP Paribas is making a difference compared to its competitors. It offers its customers free transfers and sets itself apart by displaying the exchange rate at the time of the transaction, which is guaranteed.
The My transfer offer, launched in February 2021, takes advantage of the experience of our trading rooms to obtain the best rates, high speed of execution and security of the transaction. It should be noted that this new offer concerns international transfers outside the SEPA zone, with real-time currency changes (40 currencies to date) via an international transfer tool (MTS 2).
For merchants, the instant payment solution Instanea also offers instant payment using the aggregation technology of open banking specialist Token. This is proof that the Second Payment Services Directive (PSD2) and the SEPA instant transfer are being implemented by European banks. Instantaneousness is also a matter for suppliers, especially those of large companies who need visibility on the payment of their invoices. The international dimension complicates this need in some cases, given the number of actors involved and the local regulations.
The innovative solution BENEtracker, co-created with L’Oréal, enables international payments to be traced and made more fluid. It provides international payment issuers with real-time visibility of the progress and status of each transaction until the beneficiary’s account is credited. This allows for better cash management capacity, with the guarantee of strong protection of sensitive data for efficiency, transparency and trust.
Responding to our customers’ needs, and beyond
Small retailers have been able to benefit from digital innovations to bring them closer to their customers’ needs. BNP Paribas has thus offered My Business Assistant, to assist them on a daily basis, along with three solutions for secure distance selling: Axepta OnLine, Paytweak and Click & Collect by Lyf.
Another market trend, split payments - enabling consumers to pay in several instalments - has taken off phenomenally: they quadrupled between 2018 and 2020, to reach 80 billion dollars worldwide (source: Kaleido Intelligence). In France, according to a study by Alvarez & Marsal, they could increase from 5 billion euros in 2020 to 18 billion euros in 2024. On the major marketplaces in France, up to 40% of turnover is collected in instalments.
In response to this market transformation, particularly in e-commerce, BNP Paribas signed an exclusive agreement in July 2021, to acquire the French leader in split payments, FLOA.
Finally, innovation is not just about technology. The partnership signed by BNP Paribas with Accor Group to operate the ALL-VISA opens up new horizons. For the first time, BNP Paribas is managing transactions that do not necessarily originate from its own customers. Points earned when paying entitle you to benefits offered by the Accor Group.
Working with fintechs
Some of these innovations are not exclusive to BNP Paribas. Fintechs are bringing innovation and disruption to this ecosystem. “Fintechs work on verticals in a specialised way. Integrating a specific solution into our customer journey via a partnership enables us to shorten the time to market,” explains Carlo Bovero, Global Head of Cards and Retail Payments, BNP Paribas.
Detecting their innovative solutions remains a challenge to affirm and strengthen BNP Paribas’ leadership in payments.
BNP Paribas is a partner of the Paris Fintech Forum, an international meeting place for digital finance and Fintech, which takes place on 12 and 13 October 2021. Our experts will speak on the topics of “Payment and Beyond Banking”.
*GAFAM, refers to the five publicly traded US technology companies: Google, Apple, Facebook, Amazon and Microsoft.
Photos crédits : @Gorodenkoff , @UTS, @foxyburrow,