Leading international banks sign strategic payments partnership

BNP Paribas and Groupe BPCE, two of France’s biggest banks and major international finance players, are embarking on an investment partnership focused on payments.

The duo have stated a joint recognition of developments in the payments sector and the scene’s future prospects. In particular, the two firms intend to look at strategic investments in the technology side of payments.

In the long run, BNP Paribas and BPCE plan to create a common processor with a technological platform to integrate high technological standards for payments. The processor will cover operations, back-office activities and development.

“The first generation of our collaboration in payments with BNP Paribas was a great success,” said Nicolas Namias, CEO of BPCE.

“With this new industrial partnership project, in line with our next strategic plan, we are taking an important step towards accelerating innovation in payments in the coming years. 

“In this way, we will offer the best quality of service to our customers, in particular the networks Banque Populaire and Caisse d’Epargne.”

The two banks also hope for the planned processor to account for the growing use of digitalisation – in particular acceleration of mobile payments, expansion of e-commerce and demand for immediacy – and innovations brought about for domestic and international schemes such as Visa and Mastercard.

Based on the combined 178 billion transactions the two banks process, the firms expect the processor to be the leader in France and among the top three in Europe, and believe it has potential to handle transactions for other banking institutions.

As part of the partnership, the banks will also create a joint venture as a target business model. Payments trends of interest to the bank’s JV are digitalisation of payment systems, the virtualisation of debit cards and promotion of instantaneous transactions.

Jean-Laurent Bonnafé, Director and CEO of BNP Paribas, added: “Payment systems are an essential component of the bank’s relationship with its customers, and we must ensure they adhere to the highest possible standards. 

“Given that the increase in card transactions is exponential, our ambition for this processor is to create a device that is efficient and scalable across all our European locations. It is this context that demonstrates how important this joint European platform project with Groupe BPCE is, as it aims to support the acceleration of our development in payment systems.”

The partnership comes at a time of renewed investor interest in the fintech sector, particularly technology and payments. On the other side of the English channel, studies suggest that fintech has become a leading investment magnet in the UK, with challenger bank Monzo and payments provider PPRO two prominent funding targets.