Polish Consumers Embrace Open Banking, BNPL Solutions

Six banks and one million customers.

That’s all it took in 2015 to launch BLIK, a mobile payments system in Poland that allows mobile phone users to make payments via online banking.

And after more than six years in operation, the business has grown to 20 million application users, with the majority of 30 banks in Poland offering BLIK’s mobile payments system to customers. The service is used by most Polish retail businesses, including brick-and-mortar shops, and 70%-80% of all Polish eCommerce payment volumes are processed through the company’s system.

“We’ve convinced the whole society and mobile banking users to start using BLIK as the most secure [and] fastest way of paying online with mobile banking apps,” the company’s CEO Dariusz Mazurkiewicz told PYMNTS in an interview.

He added that it’s been important to separate BLIK from the banks, creating a separate payments brand that does not interfere with the relationship between banks and payment services providers (PSPs) who provide BLIK as a product to their merchant clients.

“We are outside orchestrating the whole scheme and investing a lot of money and effort into strengthening those relationships,” Mazurkiewicz said. “We also hope that this business model is very inclusive, because […] everybody is necessary to make our solution a standard in the market.”

The company’s recent third-quarter financial results revealed that the bank-owned company currently counts 8.6 million active users – about 23% of Poland’s total population – and account-based BLIK users completed nearly 200 million transactions worth close to PLN 27 billion ($6.5 billion) during that period.

Commenting on the results, Mazurkiewicz said Blik is developing into a very well-balanced and strong eCommerce platform, with P2P transfers gaining traction as the company begins its journey with contactless payments.

Part of that next phase of growth will involve replicating the success BLIK has achieved in other markets: “We want to implement our brand and payment solution in different countries […] to prove that our approach can be adopted in other banking sectors,” he noted.

Partnerships as a Strategy Against Competition

Competition in the mobile payments space is intensifying, and Mazurkiewicz said that finding the right partners and partnerships is key to protecting BLIK’s turf.

This means creating solid partnerships with banks to ensure that a standard and coherent solution is offered to all end-users, regardless of which banking institution they are associated with.

To further create customer stickiness, the banks in BLIK’s network now provide what Mazurkiewicz called the “best-in-class Android-based contactless payments technology” available on the Polish market, with a user experience that is “quite similar to what Google is offering via Google Pay.”

And because contactless is the “winning technology,” the company has also partnered with credit card giant Mastercard – a current BLIK shareholder – to expand its global reach and provide customers with a seamless, contactless experience at any payment terminal around the world.

In June of this year, three leading mobile payment providers in the Nordic region – Denmark’s MobilePay, Norway’s Vipps and the Finnish company Pivo – agreed to merge their businesses, with a goal to create “Europe’s best and most comprehensive digital wallet” and one of the largest bank-owned mobile payment providers in the Nordic region.

Read more: Nordic Mobile Wallets Must Collaborate to Fend off Competition From Global Players

When asked if a similar approach could be taken with other European players, Mazurkiewicz said that no strategy will be excluded when it comes to fending off competition — but he pointed out that there will be “exciting” strategies emerging in Europe, with mobile payment companies in the region directly competing against each other on a global scale.

The Time Is Ripe for BNPL

As it is operating in the eCommerce space, BLIK is committed to helping retailers improve their conversion rates, which can drop due to several factors – an issue with a product, negative customer reviews or how high the product is priced, for example. But according to Mazurkiewicz, most of the time it’s simply because customers cannot afford a full upfront payment.

That’s why the company is looking into providing a financing solution, like a buy now, pay later (BNPL) offering, that can help meet this growing customer need.

“[BNPL] is a very important part of the eCommerce business, which we are very interested in right now, and we think there is a big space for it within [the Polish] market that BLIK can occupy,” Mazurkiewicz remarked.

He acknowledged, however, that BNPL is still at a very early stage of development in Poland, where people are still used to making payments on the spot with debit cards, much like other European countries where the credit card market is not very active.

That said, more and more retailers are starting to see its growth potential as customers’ demand for the solution increases, especially in the fashion and luxury product space, Mazurkiewicz noted, adding that given the growing competition from global FinTech players penetrating the Polish, there is no better time for Poland’s banking sector to take the leap into BNPL.

As he said, within the next two to five years, BNPL has the potential to grab 20-30% of the total value of Polish eCommerce share, and “we [BLIK] need to play a significant role in this competitive space.”