Banks, Retailers In France Collaborate On Payments App

BNP Paribas and Credit Mutuel, the two French banks, and a group of retailers are joining forces to launch a mobile app in 2017 that will enable customers to pay for things in stores and online, as well as earn rewards and transfer money with one mobile payment solution.

According to a report by Reuters, BNP Paribas and Credit Mutuel will merge their digital wallets into one platform. Financial services firms and internet companies are aiming to capitalize on the increased use of smartphones by rolling out apps that enable customers to keep their credit and debit cards, as well as coupons and loyalty cards, in the digital world.

Reuters noted BNP Paribas and Credit Mutuel will each have a 40 percent stake in the venture, which also included retailers Auchan and Carrefour and credit card company Mastercard. Over time, they hope more companies will join the alliance.

“This structure leaves room for one or two big retailers or large industrials that could enter the capital of the company,” Thierry Laborde, BNP Paribas’ deputy chief operating officer and head of domestic markets, told Reuters.

In the early stages, customers will be able to use the new digital wallet at greater than 20,000 French retailers. A name for the app will be announced by the end of 2016, with the app available likely in the beginning part of next year.

While the French banks are forging ahead with the digital wallet, it does come at a time when consumers don’t seem to be embracing digital wallets wholeheartedly.

Gordon Smith, chief executive of consumer banking at JPMorgan Chase, recently said at an investor conference that, even with the emergence of payments platforms as diverse as Apple Pay, Samsung Pay and Android Pay, the total amount of payments used via those services accounts for less than 1 percent of payments at retailers.

Indeed, said Smith, there will be an inflection point where making payments via phones, in tandem with the convenience of that option, will give rise to a “surge” of payments using those methods. But no one knows just when that tipping point will be reached. Chase Pay, launched last year, of course, takes its place among that field of digital wallet players.