French-based aqoba has been launched
with the aim of grabbing a 5 percent share of the country’s
affinity and loyalty cards market within five years. CEO Thibauld
Lanxade tells Rodrigo
Amaral his firm can offer a complimentary rather than
alternative service to those currently available from French
banks.
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The launch of
Paris-based aqoba, the first firm accorded the status of payments
institution (PI) following the EU payments directive coming into
force on 1 November 2009, has been flagged up as an opportunity to
challenge the dominance of the country’s major retail banks.
And the new kid on the block has certainly set
itself an ambitious target: a 5 percent share of the French
affinity and loyalty cards market within the next five years.
Based on the firm’s estimates, there are 55
million payment cards in France – 20 million of which are affinity
or loyalty cards. Aqoba is looking to issue 300,000 cards in the
next 18 months and to reach 1 million cards by 2015. To achieve
this goal, it plans to offer a range of direct marketing services
alongside the issuance and management of cards programmes.
“We work with the concept of marketing linked
to electronic banking – what we call internally ‘moneting’,” aqoba
CEO Thibauld Lanxade told RBI. “‘Moneting’ derives from a
merger of the words ‘marketing’ and the French noun ‘monétique’,
which refers to card-based electronic banking.”
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By GlobalDataThe entry of new players in the card industry
has been hailed by some market observers in France as a welcome
challenge to the monopoly of banks in the segment.
Thanks to the EU directive, there are fewer
restrictions now to the entrance of new card companies in the
French market, previously the sole domain of banks and other credit
providers with at least €5 million ($6.9 million) of shareholder’s
equity.
But according to Lanxade, the services offered
by his firm can be complimentary – rather than alternatives – to
the cards departments of retail banks.
Alternative services
Last year, aqoba raised an extra €1
million in equity from its shareholders to fund its proposed
growth, and in December received the green light from the French
central bank to start operating in the payments sector. In the
process, it became the first non-banking company in the country to
do so.
If, however, it is to pose any threat to the
banks’ stranglehold on the cards sector, it will have to provide a
range of services not currently offered by the existing
players.
“In France, banks cannot use the information
from card owners for purposes other than marketing their own
products and services,” said Lanxade.
There is no such restriction for PIs and so
aqoba has created a database where data from cardholders will be
stored and processed according to the needs of the parties for whom
it issues cards.
“We can offer direct marketing services based
on the information we have. Those services include the analysis and
segmentation of spending behaviour of card holders, aspirational
profiling, anticipation of consumption trends and measuring the
effectiveness of online and offline marketing campaigns,” he
said.
“A large share of our revenues comes from
marketing campaigns derived from our database of information about
cardholders.”
An annual fee is also charged from card
holders and composes the second source of revenue for the firm.
The company’s cards are issued under the
Mastercard brand and manufactured by Belgian-based card payments
specialist Gemalto. Not being a bank, aqoba do not require card
holders to open a bank account, nor does it provide credit
facilities to them.
Its main targets are entities with a strong
link to a specific group of companies that intend to use affinity
or loyalty cards to strengthen this relationship further. Initial
clients include companies in insurance, media, transportation and
online gaming.
Targeting communities
Lanxade will also target regional
banks with close links to their local communities which, he said,
will make use of aqoba to issue affinity cards for an entity that
has a strong brand in the local market, such as a museum or a
football club.
His firm can then process the information
about the cardholders that it has stored in its database for the
benefit of the bank, which will target the acquisition of new
clients. That said, he conceded that the main obstacle for the
growth of aqoba in the market is the competition from affinity card
programmes managed by the banks.
Aqoba plans to widen the range of services
that cardholders will be able to use with their cards. The use of
non-touch technology that could enable, for example, the holders of
an affinity football card to enter the stadium on match day without
having to buy a ticket, is one development that Lanxade regards as
most promising.
The use of mobile phones as a payment platform
is another tool that is being developed.
“New technologies will allow our partners to
develop specific services linked to their cards,” he said.
As for possible international growth, Lanxade
is bullish: “At first we will be operating from France alone, but
as volumes grow, we will set up offices in other countries
benefiting from the harmonisation of rules provided by the Single
Euro Payments Area.”
The first steps of international growth will
be the result of the expansion of clients’ affinity and loyalty
card programmes outside France, with aqoba targeting growth in
countries including Spain, Germany, Belgium, Italy and the UK. The
company aims to achieve €15 million of sales by the end of 2011 and
expects to double its current staff of 12 employees by the middle
of the year.
