Banks expand their payments business

The payments market is booming. While fintechs and web giants have understood this, banks have been slower to take an interest. As a result, they are lagging behind, and intend to catch up by expanding their activities in this field.

Customer data, a treasure trove for the payment industry

While the Big Techs ( Gafams, pure players and fintechs) entered the payments sector very early on, banks have been slower to grasp the stakes. However, they are determined not to leave the field open to these new players.

The global payments market is currently worth $1,500 billion, and could double by 2030. According to the latest annual report by The Boston Consulting Group (BCG), payments revenues could reach $2,900 billion by that time.

According to the strategy consultancy, the various players in the sector should see their revenues increase by 7.3% over the next 5 years, and by 6.4% between 2025 and 2030.

One of the main reasons why the payment industry is so lucrative is that it enables the various players involved to collect a vast amount of customer data. This customer data is then used to offer a range of targeted services to both payment solution users and merchants, in return for attractive commissions.

French banks want their share of the cake

Today, banks are well aware that they need to catch up in the payments field, especially as the Covid-19 pandemic has accelerated digitalization, prompting merchants to offer new solutions.

On January 21, Crédit Agricole announced that it had acquired SFPMEI, a banking-as-a-service platform used by several unicorns specializing in the payments sector, including Lydia and Spendesk.

For its part, to be able to offer new financing solutions to its customers, La Banque Postale has set up a partnership with Alma, a fintech that has positioned itself in the fractional payment niche.

As for BNP Paribas, the strategic plan to be unveiled to investors in March is based in part on planned activities in the payments sector, which the Group intends to develop further. To give itself the means to achieve its ambitions, BNP Paribas has acquired Floa Bank, the French leader in fractional payments, which should enable the Group to cover 10 European countries within 4 years.

Abroad, traditional banks are following in the footsteps of their French counterparts. In January, US bank JP Morgan acquired a 49% stake in Viva Wallet, a Greek fintech specializing in mobile payments, for 1.2 billion euros.