Three-Bank Initiative Aims To Disrupt Online Payments In France

By Chanel Smith EMEA Editor (@PYMNTS_EMEA)

Three French banks—BNP Paribas, Societe Generale and La Banque Postale—have come together to establish a new payments system designed for Internet use.

The payments program is called Paylib and the participating banks are inviting their combined customer base—roughly 23 million—to register for Paylib. The service allows customers to make online purchases by using a login and password process instead of having to deal with re-entering card details. According to TechCrunch, Paylib is operating in a mature online payments market with similar services being offered by big name competitors such as PayPal. Yet, this hasn’t stopped several eCommerce retailers from signing up for its services.

At present, BNP Paribas, Societe Generale and La Banque Postale are the sole banks that are backing this project. However, TechCrunch reported that the new system is an open standard. The banks anticipate that more French banks will sign up for Paylib, which already boasts a 23 million-customer base in France, compared to the 7 million PayPal customers in the country.

Voyages-sncf.com, Ventesprivees.com, PrinceMinister and Leroy Merlin are some of the websites that have already worked with Paylib for the payment system’s initial roll out. TechCrunch reported that these sites are well liked by French consumers, which is a crucial part of the banks’ beginning growth strategy. They revealed that partnerships will be key for the new system’s growth and popularity.

Currently, Paylib is only available in the French market. PayPal is a global brand that is often recognized by retailers, but Paylib is attracting new merchants by offering an even lower processing fee.

Worldwide brands such as PayPal are difficult to compete with, which is why these banks had to join heads to launch a worthy alternative. Working together is the reason these banks can compete, but it is also the reason that French authorities are keeping a close eye on Paylib. If more banks request partnerships, Paylib could become a competitive player in the French payment processing industry. Officials worry that the service could cause competition issues since future growth could give more power to major banks in France.

To read the full report at TechCrunch click here.