Sep 11, 2020 
With mobile payment by QR code, the Arkéa Group and Budget Insight offer an innovative payment solution for businesses. Currently being tested with a panel of Crédit Mutuel de Bretagne (CMB) customers, this new payment method is the result of close cooperation between Budget Insight and the Innovation and Operations division of the Arkéa Group. This is a first in France, made possible by transfer initiation, and foreshadows the future of payments in the Open Banking era: simpler, faster and more secure.
A unique payment solution in France
Payment by QR code was dying a slow death, but now here it is rising from its ashes in an astonishing way. This payment system widely used in China via the WeChat Pay and Alipay mobile apps, never got beyond the experimental stage in France, unable to win over a population greatly accustomed to payment by bank card.
So what’s changed? What is new is transfer initiation by a third party. This payment method offers small businesses and the self-employed an alternative to replace checks, cash, and especially card payment terminals. This collection solution is simple, fast and secure. There is less risk of non-payment than with a check and it is less restrictive than traditional transfers for the end customer. It requires no installation, and is faster. The transaction is still confirmed in seconds, but what changes everything is that the funds can be received in 10 seconds by instant transfer and in a maximum of 1 working day by SCT (SEPA Credit Transfer), whereas with a payment by card the money takes 3 to 4 days to be credited to the beneficiary’s account.
Another great benefit, this mobile payment method by QR code via transfer initiation, offers a better user experience. By scanning the QR code, there is no need to enter the beneficiary’s details, nor to communicate their bank account details. The user arrives on a web page, chooses one of his/her bank accounts, indicates or validates the amount to be paid and the payment is made almost instantly, from bank to bank in total security, thanks to Budget Insight’s Pay product.
This innovation would never have been possible without PSD2
The new European regulation PSD2, which requires banks to open up their information systems, offers the possibility to initiate credit transfers through the bank’s API and therefore to make a bank-to-bank payment without any intermediaries. Far from seeing this new payment services directive as a threat, with the help of Budget Insight, The Arkéa group has seized this opportunity to address the challenges facing its business customers looking for alternative payment systems and solutions to save time in managing their collection operations.
With transfer initiation, is the future of payment by card threatened?
The point of view of Clément Coeurdeuil, Budget Insight Chairman: “The simplified card-free payment experience will develop especially in peer-to-peer payments driven by such players as Lydia. Does that mean that cards will disappear completely, as in China? No, I don’t think so. Payment by bank card is based on robust facilities and remains a very powerful means of payment in Europe. However, I am convinced that we will have more and more means of payment at our disposal and that cards will probably be less dominant in the future. With the advent of mobile payments, cards are likely to be in competition with other payment systems better suited to certain uses. Paying for a trip by card, for example, will probably disappear because this poses a problem in terms of the amount ceiling.”
What will the next use cases suited to payment by transfer be
Topping up wallets or secondary accounts is one of the most widespread uses. Lydia, the first customer to use Pay, was a pioneer in this field. The product enables users to easily deposit money into their Lydia account and issue transfers from their aggregated bank accounts. Neobanks are also interested in this service, to facilitate the transfer of money from a main account to a secondary account.
In addition, invoice payment, currently being experimented with several Budget Insight customers in the management software sector, is one very promising use case. This use is consistent with the move to total dematerialization of corporate management and is a source of very significant cost and time savings.
Finally, merchant payments by transfer initiation is still at the experimental stage but addresses the challenges facing retailers in terms of managing costs, card ceilings and fraud via chargebacks, since the transfer is irrevocable.
“We are seeing a real desire by merchants for new experiences that are simpler for their customers and less dependent on a card and the ceiling problems that ensue. The challenge for them is to deliver a better experience to their customers” commented Clément Coeurdeuil, Budget Insight Chairman
The already available instant transfer and the multiple transfers being developed at Budget Insight open up new perspectives.
Let’s reinvent financial services together!
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