Interview of Jérôme Connac, Director of Business Development & co-founder of Limonetik
Julien Guerrand, community manager meetthepayment.com: Hi Jérôme! Last week, BNP-Paribas / La Banque Postale / Société Générale announced the launch of PayLib, a popular e-wallet solution. Can you explain to us the reasons for your interest in this?
Jérôme Connac: First of all, our interest in this area isn’t something new. The banks have always been watching the way PayPal works and is growing, amongst other reasons for the rate that PayPal is able to charge traders…
JG: You’re talking here about fees applied to each transaction on a trading site which covers the transportation costs of the purchaser through the e-trader, is it that?
JC: Exactly. You should know that where French banks are able to take off 0.5% – or even less – of the transaction, PayPal is between 1 and 3.5%. Banks feel like a slice of the cake is escaping them and this is in a context where the interchange rate is low. This rate corresponds to the fees applied to the trader for any credit card transaction. This means that French banks are now caught between e-wallets which bill comfortably without going through them and the interchange rate that they must lower according to European rules!
JG: I understand why they are launching into new territories; they need to find new sources of revenue. E-wallets, what definition would you suggest?
JC: It’s an electronic wallet with a username and password which includes all payment methods, whether it’s a credit card, loyalty card or discount coupons.
JG: That’s shed some light on the discussion. Is the challenge for the banks to reintegrate into their credit flow what is escaping them at the moment?
JC: They absolutely want to “reintermediate” the relationship between the trader and the purchaser. Right now the trading site is the master in this relationship, right up to the last moment the bank and the purchaser are invisible on the payment page. Let us imagine now that banks are able to reintegrate this process and are present at the concluding moment: they will be able to promote offers for their beneficiaries and instantly target their purchases to gain new business revenue and income.
JG: We are leaving the world of banking for one of marketing in this case?
JC: Clearly! For a long time the marketing giants have offered their own solutions to payment. Payment is no longer the reserve of banks, it’s an open market. What’s the main reason for Google launching its wallet with 0% on transactions? To get the data! Google has always worked via a detailed knowledge of its users to offer advertising space to its advertising customers which is always more targeted. For banks, wallets are the bridge between the banking world and the marketing one, from a world with margins lower than 1% to a world with more interesting margins.
JG: Everything seems much clearer now… Thanks for information Jérôme, see you soon!
JC: You’re welcome.
NB: Don’t hesitate to react to this interview; Jérôme will answer your comments.