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Expert opinion

Europe: a rich and diverse payments market

Tuesday 9 April 2019 | 08:49 AM CET

Andréa Toucinho, Payments expert: “Despite many initiatives, from political institutions and actors, it is always difficult to analyse European payments market as a whole and in one hand”

The specificities, in payments like in society, are linked to history and culture of the different countries which compose this region.

Instant payments in France (and Europe)

In France, payments market is above all driven by payment cards. Despite some measure, checks are used not only in B2B but also in B2C context. Instant payment appears progressively thanks to some individual initiatives from banks like Natixis (Groupe BPCE) - the first French bank which has launched instant payment - and Crédit Mutuel Arkéa. In France, instant payment has led to many debates for instance in the field of business models, use cases and place in the market in relation with other tools, like payments cards. The situation is very different in other European countries such as in the Netherlands where instant payment appears like “the new normal” thanks to consumers’ habit and the success of iDeal. We can also mention the case of United Kingdom, with Faster Payment, and Northern European countries, more linked to digital uses, which is not yet the case in other markets.

Thus, a very different situation is also observed in Italy, with a strong use of cash, where new generations are more and more linked to smartphone usage, and the banking sector is really proactive in adopting instant payment for B2C and B2B uses.

PSD2 contribution to the evolution of fintech Portuguese and Spanish market

In Portugal, the payments market is driven by a big national actor called SIBS which is the central utility for payments, running the payment system end-to-end for banks, the Central Bank, government, etc. Currently, SIBS plays a transversal role in the payment system, covering services on ATM and POS networks. SIBS launched several spin-offs of complementary solutions such as Via Verde (contactless road toll and parking payments), digital certification, card personalisation and a BPO unit for document dematerialisation and process optimisation.

This actor also knew how to ride the wave of regulations to modernise its strategy. For example, in March 2019 the company launched an API Market, created a new logo and opened a position in the market, aiming to work not only with banks, but also with fintechs. In this context, instant payment, which has been launched in September 2018, represents the beginning of a new chapter for a naturally globalised market. In fact, it is important to remind that PSD2 represents a huge step for Portuguese payments market with an evolution from a conservative to a real modern and opened market. The position of national supervisor Banco de Portugal, which has created a fintech hub to drive collaboration with new actors, testifies to this reality.

In addition, we can also mention that the Portuguese payments market is naturally opened to globalisation: national bank Millennium BCP signed an agreement with Alipay and China with the purpose of fostering investments in the country. A same view is observed in neighbouring country Spain which has done many investments in the development of innovative finance. National fintech association – Asociacion Española fintech y insurtech (Aefi) – represents all actors of the market from personal finance to crowdfunding and payments, or even wealthtech and it is engaged in a real global strategy. Aefi is also member of Alianza fintech Iberoamericana and works with Latin-America on many subjects.

It also aims at working with other European fintech associations to create a single European position in this sector. At a national level, Aefi focuses on promoting the development of innovative finance in Spain. It drives discussions with supervisors, banks, and produces many information tools, like white papers, to educate the market on these issues. The place of women in finance is also a huge project of the association with the creation, in 2019, of the Fintech Women Network. One of the main challenge for all these countries and actors will be, for the evolution of the market, to learn how to work together to develop a real globalised position. This is one of the most important goal for the future of our market if we consider the necessity to promote European sovereignty in the field of payments.

Join Andrea Toucinho in Paris, on April the 16th, for her conference about fintech and payments in Europe, with the participation of European Institute of Financial Regulation (EIFR), ACPR (French supervisor), French banking federation, Particeep and Italia Fintech.

To read the event’s program (in French), you can access this link.

About Andréa Toucinho

Payments and financial services expert, Andréa Toucinho worked during 10 years as Journalist - Editor in Chief of Point Banque magazine and Head of "PayForum" and "Banque et Innovation" events. She works since 2018 in consulting area with activities in Paris as Director of Studies, Prospective and Training of Partelya Consulting, and Ambassador for France of European Women Payments Network (EWPN). She also developed activities with Portugal and Spain as France Representative of Aefi and Afip Fintech Associations. She realized in 2018 a white paper about instant payment which has been published in November in French payments market.