Whether individually or collectively, French banks are not very successful in the payments sector. Launched in 2013 on the initiative of several local groups, Paylib has not found its audience.
And even bank/startup associations have not taken action, such as Pumpkin, acquired in 2017 by Crédit Mutuel Arkéa and shut down in 2022. To capture a significant share of the market, Crédit Agricole is joining forces with a major partner and not a fintech.
50% of the capital plus one share for Worldline
The establishment is indeed entering into exclusive negotiations with Worldline with the aim of “creating a major player in services for merchants in France. The objective is thus to give birth to an operational joint venture in 2025.
Such a project may seem expensive at first glance. However, the potential benefits are substantial. Crédit Agricole recalls that France, with its 700 billion euros in merchant turnover volume (MSV), is “the largest payments market” in continental Europe.
Its conquest, however, requires a long-term strategy, thus justifying a “strategic partnership” and the creation of a joint entity, which would be majority-owned by Worldline (50% of the capital plus one share).
In this common account, the bank brings its “anchorage”, its knowledge of the market and its distribution networks. As for Worldline, its share lies in its global infrastructures, its technological expertise and its capacity for innovation. But to imagine this winning couple, the two parties still have to negotiate.
Preserving its place in the customer relationship
For the time being, the signature relates to a “non-binding exclusive negotiation agreement with a view to a strategic partnership. The engagement is negotiated before the wedding. One certainty already, however: the stakes are high.
“Payments are at the heart of the relationship with our customers and as such represent a strategic activity for the Crédit Agricole Group”, recalls Jean-Paul Mazoyer, its Deputy Chief Executive Officer.
However, a number of players, fintech and Gafam, have already interfered in this relationship, thus capturing valuable data on consumers. Customer knowledge is a strategic asset.
Through a partnership, Crédit Agricole therefore hopes to support its objectives, including that of growing twice as fast as the market in this payment activity, where competition is not weakening.
80M€ invested together in 2023-2024
According to the latest EY Fintech100 ranking, investments (fundraising) increased significantly in 2022 among startups positioned on payments. This segment brings together 23% of players, ie 9 points more in one year.
Crédit Agricole’s model is to develop a new player equipped with Worldline’s European transaction processing platforms. It is also responsible for designing its products for the French market and providing an all-in-one offer to key accounts.
“The joint venture would also be in charge of ensuring the commercial development of this alliance, directly with the largest merchants while providing active support to the banks’ distribution channels,” the statement added.
Before seeing the light of day, the negotiations will therefore have to succeed, and pass the various controls, including those of the regulators. In the event of a green light, the project foresees a joint investment of 80 million euros in 2023-2024.
These funds are intended for the development of products and offers and the implementation of the joint venture. Finally, from 2025, the couple will be operational and will begin to generate turnover and gross operating income.