In conversation with Pierre-Antoine Vacheron, CEO Payments, Groupe BPCE
Published: 1 November 2023
By May Moorwood
Digital Content Producer
In the run up to MoneyLIVE Payments Europe, we wanted to give you a sneak peek into some of the cutting-edge content you can expect from our stages this year – so we’ve got a couple of exclusive interviews with our top speakers who are ready to share their payments expertise! First up, we’ve got Pierre-Antoine Vacheron, CEO Payments, Groupe BPCE on everything ecommerce – from SoftPOS and contextual finance to BaaS and AI innovation.
Top three trends: what to watch in the payments innovation landscape
The trend that will probably have the most impact is social commerce, boosted by the habits of younger generations. Merchants can capitalise on this by integrating social media at check out, allowing buyers to pay directly from their social media accounts or to split payments with friends and family.
Payments are exponentially embedded in digital journeys. This is shaking the whole ecosystem.
More generally, e-commerce is becoming increasingly contextualised – driven by social media, mobile, and platforms – which means that payments are exponentially embedded in digital journeys. This is shaking the whole ecosystem. The tokenisation of payments has led to increased integration of X-Pays and alternative wallets, which provide the key features required to support embedded payments in contextualised or mobile journeys, while also reducing friction at check out.
Finally, the utilisation of advanced AI for fraud management is seeing huge growth. The emergence of new and increasingly unpredictable payments patterns with the rise of contextual finance means the ecosystem is facing a growing challenge when looking to meet Strong Customer Authentication requirements and combat fraud.
Talking tech: the most influential developments for payments
If we think short term, there is indeed a lot happening in the realm of payments processing optimisation. Take for instance orchestrator platforms that enable merchants enhance their performance by intelligently route transactions to specific payment service providers (PSPs). This routing depends on various factors, including the context of the transaction, the payment method, and geographical location. This dependence marks a departure from the all-encompassing global solutions that have been so successful in recent years.
At BPCE/Payplug we have experienced this change firsthand with our specific “French card” product for orchestrators and PayFacs. By focussing on a specific geography, we seen a huge improvement in the service we provide at checkout and have had an amazing reception from international merchants who are able to easily integrate the product through orchestrator platforms.
If we think mid-term, the evolution of technology and regulation will likely boost account to account bank payments when it comes to commerce. The progress in Open Banking, coupled with BaaS infrastructures and instant payment systems, presents a huge opportunity to transform payments journeys, enabling better planning, and aggregate payments at a lower cost for stakeholders.
From our experience at Groupe BPCE (with our FinTechs Bridge and Xpollens), it is evident that Open Banking currently revolves around offering solutions. Many customers are unaware of the potential solutions available to address their payment-related challenges. There is still a need for education in this regard, but progress is underway. Success depends on the performance of APIs to connect bank accounts, and on the establishment of appropriate rules to ensure a seamless payment experience, akin to using cards. We at Groupe BPCE are counting on the European Payments Initiative to play this role in Europe.
When it comes to Distributed Ledger Technology (DLT), we believe it is a less viable option at the moment. This is mainly because regulations are still in their early stages and the technology itself can be costly compared to traditional FIAT payment methods.
Meeting ecommerce expectations: the omnichannel imperative
When it comes to ecommerce, the main contribution of payments providers has been to remove friction during the merchant lifecycle (onboarding, integration in the merchant ecosystem, reconciliation, and settlement), while also offering advanced features such as BNPL, alternative payment methods and customised payment pages. The challenge today is to export this simplicity and agility from online to offline: to offer the same experience as today’s digital journeys in physical commerce. Achieving this is essential for realising true omnichannel capabilities. Due to their widespread presence and renewed ambition in payments, banks have a significant role to play in this transition. However, they require the right set-up: specifically, a dedicated PSP with a strong digital focus, capable of delivering comprehensive solutions that span from online to offline. This is what we have done at BPCE with Payplug, which, over the course of five years, has established itself as the leading digital commerce player in France.
The challenge today is to export this simplicity and agility from online to offline: to offer the same experience as today’s digital journeys in physical commerce.
Spotlight on SoftPOS: predicting the impact for merchants
SoftPOS offers a fantastic opportunity for small merchants, mobile merchants and entrepreneurs to easily accept payments in a universal and convenient manner, via card transactions, while keeping costs low. It simplifies the payments process with digital onboarding and allows for remote management of payment devices, making it straightforward to start or expand your business from online to offline.
But SoftPOS isn’t limited to smaller businesses. It also provides large merchants with the potential to significantly increase their points of interaction, especially during busy seasons like summer sales or Christmas. It can be used to enhance the retail experience, particularly in high-end retail, where the goal is to empower every sales attendant to provide end-to-end support for customers, from offering advice to completing the checkout process. Given our position as the second-largest banking group in France, we are actively preparing to launch SoftPOS at a large scale within our domestic market.
Debunking BaaS: pros, cons and “the next phase of revolution”
“Banking as a Service” is a buzz word that is often misunderstood. Think of it as a toolbox, to which you can connect as a service via standard APIs (Application Programming Interfaces) in a Software as a Service (SaaS) model. This toolbox provides access to various payment methods for both receiving and making payments, such as cards, direct debits (SDD), and instant credit transfers (inst-SCT). You can then customise these payment methods by implementing specific business rules tailored to your digital transformation and revenue acceleration goals.
For instance, retailers can use this toolbox to create loyalty programs that allow customers to pay and earn loyalty points within their network using branded virtual cards. You can also use this type of solution to optimise recurring payments through SDD or SCT, leveraging on the licencing offered by a BaaS provider. Additionally, you can use virtual IBANs to better track consumer payments, making tasks like refund management more efficient.
BaaS represents the next phase of revolution in the industry.
Over the recent years, BPCE has developed its own BaaS solution, Xpollens, which has now successfully implemented various use cases that highlight the potential of the BaaS approach for retailers seeking to enhance their customer journeys. BaaS represents the next phase of revolution in the industry.
If you enjoyed hearing from Pierre-Antoine Vacheron, don’t miss out on our Leaders’ forum: Navigating an evolving payments ecosystem, where he will be joined by Head of Payments, Netherlands from J.P.Morgan, Head of Cards and Merchant Services from ING and more! Register your place at this year’s MoneyLIVE Payments Europe from 21st to 22nd November NOW.
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CEO Payments, Groupe BPCE