Innovation Insider with Faysal Oudmine Co-Founder and CEO and Head of E-Commerce Amaury Bentaïeb at Societe Generale.

We’re always on the look-out for new ways to serve Societe Generale’s customers better and, when we can’t build it ourselves, we forge partnerships with fintechs to fast track a product or service to meet their immediate needs. It’s a feature of our innovation strategy as we strive to build the bank of the future. 

 In Fintecture we found a company that is pioneering a new way to address a major pain point for our business customers in the field of payments. Our partnership has proved to be so successful that we became one of the investors in a seed funding round announced in May.

Fintecture is growing rapidly since the fund-raise, so I was delighted to catch-up with Co-Founder and CEO Faysal Oudmine recently and Societe Generale’s Head of E-Commerce, Amaury Bentaïeb, on how the partnership is faring.

Faysal, what does Fintecture offer and how do your customers benefit?

We’ve developed an account to account (A2A) payment infrastructure that cuts out all the intermediaries between merchants and their customers. It’s a simple and secured service that costs merchants a fraction of their usual payment providers.

Our infrastructure is for merchants who are primarily selling to other businesses (B2B) but we also serve those selling to consumers (B2C). In B2B, payments are a huge pain for merchants and their customers. Cards account for less than half of B2B payments and the rest is by bank wires or cheques. It’s a heavy, or non-seamless user experience for payers and merchants because of the reconciliations and security involved. 

We bypass the card payment limits that cause decline rates, enabling merchants to increase their average order value and generate more revenue. We bring perfect security to them and their customers, because all our payments have a two factor customer authentication.

Fintecture provides a much sleeker user experience. A merchant’s customer just needs to select the Fintecture solution to make their payment and identify their bank. You just need to have the web banking app of a bank we support. Fintecture’s technology connects to their bank and initiates an irrevocable payment order directly, which the payer confirms through a strong customer authentication to confirm the payment. When a merchant needs to make a refund, we process it so the consumer can access the funds almost instantly rather than waiting up to a week. 

Where did you get the idea for Fintecture?

The co-founders and I saw the opportunities arising from the regulatory and technological change in the banking system – Open Banking – which enabled outsiders to enter the payments landscape. It represented a generational transformation of the payments industry, one of the biggest industries in the world. We saw it as an opportunity to build value for merchants through a business with a worldwide reach, so we started building Fintecture four years ago.

The four of us have complementary skills, with expertise in financial regulation, the core banking system and technology and in business. Reda (Charai) and I have been business partners for the past decade as entrepreneurs and luckily we met Tatiana (Rozoum) and Anjan (Som).

There are lots of ways of making payments, so how is Fintecture succeeding against its competitors?

We launched commercially just over a year ago after building the infrastructure and obtaining the regulatory approvals. We have successfully integrated more than 24 different bank application programming interface (API) standards and more than 2000 bank APIs. We started from France, where we support more than 95% of the banks, and our licence extends to all 30 countries in the European Economic Area.

Our solution is competing with a wide range of other payment solutions. I don't see a single player tackling payments the way we do. It's a completely independent solution from the current networks, which enables us to change the old system and start a new one. Since we signed the seed funding round of capital in Q2 2021, we have multiplied the monthly volume of processed transactions sixfold.

In the past nine months we have won 100% of more than 10 RFPs (requests for proposals) that we have submitted to category leaders – companies generating more than €1 billion of gross merchandise value annually -- against different kinds of competitors from Europe and elsewhere. We believe this success rate doesn’t happen by chance and it’s because we have a superior and unique product.

What is your business model?

We bill a success fee for each processed transaction which is on average 40% less than what merchants are currently paying. For merchants, the more it’s used, their payment cost is less.

Currently we have almost 1,000 merchants using our payment infrastructure and among them are some of the largest retailers in Europe. Our ambition is to build the largest merchant community around us, serving SMEs as well as the large enterprises. We started in France and Europe but we won’t stop there. As outsiders to the payments industry our customers – merchants -- guide our product roadmap. We have a very active community of merchants who are building the product with us and this will continue. For example, we developed a request to pay solution enabling merchants to close transactions at distance (pay by link) or physical ones (pay by QR code) and we have also developed a new way for large retailers to refund their customers efficiently and instantly, which is increasing their satisfaction and repeat purchase rates. 

How is your relationship with Societe Generale since it participated in your seed round of funding in May?

If you are a bank, you have a choice: you either fight the trend unleashed by Open Banking or you embrace it. We always thought our interests would be best aligned with smart banks that recognise what's happening and that is the spirit of our partnership with Societe Generale.

The relationship has never been about funding – there are enough funds in the market and we are in a hot industry -- so we were more focused on the business partnership. We started with a business distribution partnership where Societe Generale brought Finecture’s innovations to their customers, especially large customers. Both our organisations have benefited from the value delivered by the partnership.

What are the long-term prospects for Fintecture and the payments sector?

The payments industry represents a huge pool of fees paid by merchants. We believe that you cannot continue to bill merchants indefinitely just for simple payments, which combine an identity check and a transfer of information. We believe that we can fairly keep this fee pool and even grow it if we bring much more value to merchants and their customers.

 Open Banking allowed challengers to develop efficient payment solutions, thanks to APIs and introducing instant free transfers. This is already the case in the UK and maybe Sweden. It will be accelerated in other European countries in the next few years. We believe Fintecture is the go-to A2A solution in France and are preparing to bring our infrastructure across Europe - especially to the underserved markets of Southern Europe. Our ambition isn’t limited to Europe, however… 

Amaury, how is the relationship with Fintecture helping Societe Generale and its customers?

We were really impressed with the ease of use of Fintecture’s payments infrastructure when we examined it, so we had no hesitation in introducing major business account clients to it. As Faysal has outlined, Fintecture addresses a number of pain points in terms of payments, refunds and other areas, which we have been looking to address for our customers

Our commercial partnership with Fintecture has been highly beneficial for our customers and we could see from their engagement and feedback that Fintecture’s infrastructure had so much potential in carving out a space in the payments industry.

As a bank, we saw how the European Union’s Payment Services Directive was shaking up banking services and how Open Banking would commoditise payment services. Fintecture is one important way that we are innovating and providing value-add services in this area.