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  • Blockchain
  • Payment
  • France

A Dutch Neo-Bank Lands in France

FACTS

  • The Dutch neo-bank Bunq enters the French market.
  • 5 minutes to set up an account: The mobile-based customer process is reminiscent of previous launches by other neo-banking players in France. Customers would provide a number of basic information (name, phone number, e-mail), scan a piece of ID and validate their identity using a dynamic selfie and voice recording. These elements are immediately validated after by Bunq.
  • Registrations are free. They provide access to a bank account and let customers carry out credit transfers. The latter feature is not promoted by Bunq: once the customer is signed up, he is automatically assigned a Premium account for one month.
  • Three packages:
    • Premium (€7.99/month): 3 Mastercard cards, a joint account, free ATM withdrawals
    • Business (€9.99/month): Premium features + real-time accounting and management option for expense reports
    • Pack (€19.99/month): Premium features + grouped accounts (including Business accounts) from 3 additional people to share subscription fees
  • Other proposed features: the ability to create up to 25 bank accounts including unique IBANs to separate expenses, cash withdrawals (free up to 10 times a month, then €0.99 per withdrawal regardless the location), low-cost international money transfer via TransferWise, Auto Save feature rounding up payments to the nearest Euro, accounting with Apple Pay, payment link, etc.

CHALLENGES

  • Testing the French market: Bunq was founded by its sole shareholder in 2012 in the Netherlands. It then aimed for in Germany, Austria, Italy and Spain. Their focus on France appears as a test phase: local adjustments to their offers might eventually be required.
  • A one-of-a-kind player:
    • However they have been granted European banking licence in 2015, Bunq’s offers only focus on the payments industry.
    • Just like other Northern European players, Bunq natively relies on credit transfers, i.e.: the only way for customers to fund their account (through iDEAL, Sofort or regular a bank transfer). This said, their decision to introduce a basic cardless offer in France may come as a surprise, even if customers are automatically directed to the Premium offer which includes this means of payment.
    • Their introductory offer seems all-encompassing, and stresses their experience despite low visibility in France. Their business model relies on premium features right away.

MARKET PERSPECTIVE

  • Bunq lands on a much crowded market where several neo-banks are already established. Also, most of the traditional banks launched their own brands and independent players are many, especially in the payment sector. Industry leaders managed to stand out, too: Lydia, for instance.
  • Bunq could, however, bet on their expertise on the payment market and benefit from credit transfer offers’ first steps in France. Over time, these services could become plausible alternatives to card payments in some sectors. Overall, this neo-bank reported strong increase in deposits (+800%), from €13.7 million in the end of 2016 to €104.4 million end-2017.