2020 Atypical and dynamic year… 2021: year of new functionalities?
In light of a year 2020 when the coronavirus pandemic will have upset our daily lives and strongly impacted the global economic environment, it is clear that it will also have been a surprising year from the point of view of FinTech.
Who would have bet that companies in the sector would have resisted more or less well and that they would have raised some 828,2 million euros in 63 operations ?
The past few months have demonstrated the resilience and agility of fintechs and we can undoubtedly say that despite the crisis, 2020 will have been a dynamic year for fintechs in France.
At Mastercard, which confirms itself as the partner of choice for fintechs in France and Europe, we support, within French Tech, partners such as Qonto, Swile, and Spendesk. We have supported many launches and partnerships in 2020. For example SWAN as a new European Bank as a Service partner of Mastercard- but also the launch of Betterway, Handsome, Self, and Money walkie with Treezor which joined the Mastercard Fintech Express program and is today a privileged partner of Mastercard in France and in Europe.
We are committed to supporting innovation and the development of fintechs and thus supporting the emergence of new payment experiences that meet consumer expectations. These new offers make it possible, for example, to strengthen financial inclusion (eg from Finense, Handsome) or even competition via the possibilities offered by Open Banking (aggregation of accounts, credit scoring, payment initiation, etc.).
So what about our challenges in 2021?
If the year 2020 was the year of creation of many Fintechs, 2021 will be, for us Mastercard, the year of the consolidation and European development of the fintechs that we support. Acquiring critical size will be a key issue in staying in the race. Like Nickel alongside which we have been present since its launch on the French market in 2014 and which chose Mastercard as its exclusive partner for its establishment in 8 European countries by 2024 or N26 now present in 24 countries in Europe.
To support the new players in the payment market in France and in Europe, Mastercard relies on its international network and its consulting, technological and marketing expertise.. Our unique positioning in the field of fintechs makes it an accelerator of choice because, beyond international development, we have the capacity to strongly support the implementation of technological innovations for the benefit of fintech customers.
A technological company in the global payments industry, Mastercard will also strengthen its positioning for more than ten years with all players in the ecosystem. We will continue to share the culture of innovation, support the digitization of the economy and support new smart experiences.
To this end, I am sharing with you 4 innovations that we have identified and on which we will base our efforts and which we will develop during the coming year.
1 / The Request to Pay / bill payment (and the Bill Pay solution)
The French EBPP (electronic bill payment and presentment) market represents € 500 billion, with 80% direct debits and 15% checks.
Mastercard's Bill Pay solution, which is part of the Request to Pay standard, developed at European level within the framework of the EPC (European Payment Council), allows users to take control of their payment. invoices. Indeed, Bill Pay interfaces between the major billers such as Orange, EDF, etc. and the issuing banks, to offer the dematerialization of the bill, the presentation of the bill on the customer's online banking space, the call of the payment (compatible with any card payment method, transfer, direct debit, etc.) and automatic reconciliation.
As a result, the solution makes it possible to give back control on the one hand to end consumers over the payment of their invoices and on the other hand to issuing banks to enhance remote banking with new services, and finally, for the biller a optimization of costs through better collection of payments and better reconciliation.
2 / Payment in installments
The pandemic has accelerated the use of payment in installments. Since confinement, companies specializing in payment in three or four installments have thus seen their activity grow, or even explode in some cases. According to the firm McKinsey, companies offering this type of service (“point of sell financing”) have experienced “growth of 40 to 50%” in recent years.
This is particularly the case of the Klarna company, whose valuation has reached record highs with more than 10 billion dollars, higher than those of certain large European banks.
A decrease in the use of credit / revolving cards and an increase in the use of payment in installments, directly integrated into the shopping experience and within a merchant environment is a paradigm shift. Indeed, the large merchants offer more and more these possibilities of payment in several installments or of deferred payment.
In France, these offers are popularized by players such as Floa, Oney, Cofidis, Cofinoga and more recently new players such as Alma, Cresh or Pledg for B2C or Finexkap for B2B. Mastercard supports them through commercial and technological partnerships.
3 / Open banking
Open Banking is one of the main structuring movements in the market. Many use cases have been enabled thanks to access to accounts or the initiation of payment (account / card reloading, initiation of a transfer to pay at a merchant, instant credit scoring and eligibility, billing management , aggregation of accounts and budget management, etc.).
Mastercard has been investing in open banking for several years, notably with the launch in 2019 of a complete set of solutions in Europe (Open Banking Connect, Open Banking Protect, Open Banking Resolve). More recently, Mastercard accelerated its open banking strategy with the acquisition of Finicity, one of North America's leading providers of real-time access to financial data and information.
4 / The tap on phone
VSEs / SMEs which, let us remember, represent 90% of companies around the world, need to have solutions that allow them to accept payments at a lower cost, on their phone. This is what the Tap on phone Mastercard offers, which accompanies the launch of pilots both on the technical and certification side as well as on the commercial deployment side. This contactless technology is currently totally relevant because it helps the digitization of traders. In addition, for large retailers, the Tap on phone is a “queue busting” solution because it also offers the possibility of paying on the tablet of a salesperson in store and therefore reducing queues at the checkout.
France FinTech, the professional association of French fintech, insurtech and regtech, and Bpifrance publish the biannual fundraising barometer.