Transforming the way people pay in Poland

With the sun shining over Europe, I am about to leave pretty England for Poland. In the run up to my visit I’ve had a chance to speak to some of the people of Poland to understand how they pay and how this has changed recently. As Santander became the latest to launch their mobile payment service app last month, I learn what consumers think about newly launched services.

Poland’s Central Bank Narodowy Bank Polski (NBP) express their mission simply: “We protect the value of money”. Indeed as the European Union sank into recession in 2008,  Poland stood out as one country that seemed to be getting it right. Since accession to the EU in 2004, Poland has made considerable progress, though important sectors still need modernisation.

With neighbour Ukraine facing a grave crisis, we recently completed our study of Payment systems in Russia, just ahead of the recent furore over card payments. We have been deeply interested in the progress made by each of the countries in Emerging Europe, and this is part of the work we undertook to understand more about how money is going digital in Poland.

In July last year six of the largest banks in Poland got together to build a mobile payment service. We knew it was important as it involved Alior Bank, Bank Millennium, Bank Zachodni WBK, BRE Bank, ING Bank and PKO Bank Polski, who together reach 70% of the banked customers. They set out to create an open, interoperable bank-based payment service that would support cash withdrawal, mobile money transfer, mobile payments and more. While elsewhere in Europe mobile operators were gearing up for a leading role in payments, Poland stood out as a bank-led market. But would things take off, or would this be just another case of business model paralysis?

Guess what, it seems big changes are indeed afoot.  One of the interesting developments people spoke to us about was mobile payment at discount stores. Poland’s largest discount store Biedronka ( Polish for “Lady Bug”) has recently given their customers something pretty important – a non-cash way to pay for their goods, where normally only cash was accepted. What is interesting to me is that this development does appear to be a case in point of “protecting the value of money” as NBP wants to do. It appears that the move away from cash is because a business model has been found that allows the chain to offer an alternative without this inflating cost to the store, and ultimately to customers.

Jeronimo Martins Polska SA owns the largest retail network in Poland, Biedronka. With over 2,400 stores in 900 cities, Biedronka, The Discount Shop of Poland is the biggest, enjoying an estimated 60% of the discount market. People like to shop here in large quantities, for provisions that can last 1-2 weeks as they receive good offers that way. However until recently the store accepted only cash. People were unable to pay using their cards.

Now this is set to change. Customers can pay using their mobile phones. Recently this large retail chain has adopted PEO PAY. PeoPay supports non-cash payments in shops, as well as fast money transfers, online payment and cash withdrawal from Bank Pekao SA ATMs.

Customers of Getin Bank and Alior bank use IKAS. IKAS is a free app that works on most phones and does not just rely on smartphones. The service is available across mobile operators.

And now there is BZWBK24, the latest mobile banking app from Bank Zachodni WBK, part of the Santander group. The cryptic name does not refer to a top secret project – it is a mobile wallet given by the bank to their customers for making payments across a wide range of services.

So what do customers make of all this? It seems they do fairly large purchases at these stores, to last them a week, or even two. They trust banks as the providers for payments, and it seems these services could meet an important need, while helping the store maintain their reputation of delivering value for money – no “costly” card payments here.

Read more about these and other services in our soon to be launched “Digital Money in Poland 2014” viewport.

Charmaine Oak will be speaking on “The transformation of money – new perspectives for payment services” at the Poland Payments Summit Warsaw on the 21st of May 2014 at 11 am. If you plan to attend, we look forward to meeting you there. We’ll have highlights of our research of 2014, and you can trawl through the premium content of our portal and see latest copies of our reports.