Jacquelin Becheau La Fonta, co-founder and Director of International & Partnerships, and Charles de Gastines, co-founder and CEO of Paylead.
The emergence and growth of the concept of "financial media networks" comes straight from the retail sector, and corresponds to the advertising-style monetization of banks' digital channels. First launched in the United States, notably with Chase, it is now developing in France with initiatives such as Boursorama's The Corner.
Paylead, a company specializing in the use of payment data to offer personalized rewards, is a pioneer in this field. Co-founder Jacquelin Becheau La Fonta talked to us about this trend and the market outlook, with major developments expected in the coming years.
Jacquelin, could you tell us a little about your background?
I'm an entrepreneur at heart. As a student, I set up my first company, which was a failure - almost a godsend if you follow the American doctrine! But that didn't demotivate me - on the contrary. I wanted to go through the "big company" stage, thinking that it would help me to be a better entrepreneur afterwards. After 4 years as a sales rep at Procter & Gamble, I joined 2 great French scale-ups, MonDocteur bought by Doctolib and Stuart bought by Geopost.
I wanted to join these projects to familiarize myself with the startup culture and learn as much as possible with a view to embarking on a new entrepreneurial adventure. I took the plunge with the creation of Paylead in 2016 in the company of a friend, Charles de Gastines, a company for which I now act as Director of Partnerships and International.
What triggered the creation of Paylead?
It was the combination of 2 regulations that inspired us in the creation of Paylead. On the one hand, the RGPD (General Data Protection Regulation), giving a framework for secure processing of customers' personal data, and on the other, the DSP2 (Payment Services Directive), which framed access to bank data. It was in this context that we identified the concept of "Card Linked Offers" (CLO), i.e. cashback made automatic thanks to card payment data. Already a success in the United States since 2008, the process offered extremely interesting potential in Europe.
We then launched our own CLO platform, which we enriched with new functionalities, until we were able to propose a complete "Financial Media" offer. This is a Retail Media market segment tailored to the needs of financial institutions, with a wide variety of loyalty formats for bank customers.
Today, we work with some 30 banks and/or payment institutions on the one hand, and over 200 merchants and brands on the other. In 2023, our platform processed around 62 billion euros worth of transactions.
From the consumer's point of view, ow does automatic cashback work, and how is it better than traditional cashback?
Cashback - whether automatic or traditional - consists of reimbursing the consumer a percentage of their purchase.
In practice, CLO or Automatic Cashback is a cashback offer proposed by a financial institution (bank or fintech) to its customers, who then benefit from these advantages from their application and by simple payment with the associated bank card. The purchase is detected thanks to the payment data, and the cashback is reimbursed automatically, without the consumer having to activate the offer.
This is a very strong market trend, which you also identified during the last DBX published by Sopra Steria , with 76% of consumers declaring themselves to be in favor of CLO and ready to share their data in this context. This growing appetite can be seen in all European countries, and is confirmed in all the studies carried out by the banks we work with, for whom automatic cashback is systematically one of the Top 2 functionalities most eagerly awaited by their customers.
In comparison, traditional cashback requires the consumer to visit a specialized site and activate each offer they wish to use. This triggers the downloading of a cookie on their browser, redirecting them to the merchant's page where they must make the purchase. It's all about the cookie, not the payment.
Apart from the fact that the overall experience is very tedious for the customer, this method only works for online purchases, which greatly reduces its appeal. However, some applications, such as Revolut's, integrate traditional cashback into excellent travel booking experiences. This is a good illustration of a more global "Financial Media Networks" approach that combines the various technologies available.
Paylead recently reported on the success of its approach with wine merchant Nicolas. How are advertisers positioned at the heart of your platform?
First of all, let's remember one important fact: behind a cashback offer, there is first and foremost a retailer who wants to run an advertising campaign. Retailers need to see a return on their investment.
At Paylead, we do just that. Firstly, because a bank is very secure in terms of image, offering a privileged marketing channel for brands. Secondly, consumers tend to open communications sent by their bank, which means this channel is particularly effective. Thirdly, the data we're talking about here is unique.
Our analysis of pseudonymised payment data enables advertisers to carry out very precise targeting and ensure the effectiveness of their campaigns. And last but not least, as described above, the customer experience is simple, personalized and seamless, enabling real savings for them in their day-to-day spending, which responds to a strong consumer concern.
Customer satisfaction is at the heart of your approach.
Of course we do! The end customer remains at the heart of our model. Our mission is to integrate loyalty experiences with consumers' payment experiences. We want to develop synergies between banks and brands to enrich every shopping experience.
Speaking of banks, how do they benefit from distributing a solution like Paylead to their customers?
It's worth noting that banks are already obliged to share their customer data linked to payment accounts, free of charge, under PSD2. Now, thanks to Paylead, they can finally benefit from the use of this data.
Firstly, by positioning themselves favorably with their customers, through a relevant offer of benefits in the current context of concerns about inflation and purchasing power.
Also, via the new opportunities offered by monetization. Indirectly, through the increased use of bankcards (and thus the strengthening of customer relations) as a result of integrating rewards into the payment method.But also directly, with the possibility of obtaining - if they so wish - a commission for bringing in business paid for by PayLead.
All this in a completely secure environment for the customer, as we do not know the customer's identity; we only use pseudonymised payment data.
The "Financial Media Network" concept is making a big splash. Do you see automatic cashback as a first step towards this broader concept of financial media networks?
This concept has indeed been popularized this year and comes to us from "retail media", a similar movement seen in retail, notably with platforms such as Amazon, which generated 3.4% of its sales from this "retail media" segment in 2020. By 2023, this figure has almost doubled to 6.4%, with margins of between 50% and 90%.
We are now at a similar inflection point in the banking industry, thanks to the impetus of major banks and the use of CLO platforms.
Chase's announcement last April of the launch of Chase Media Solutions is truly emblematic of this movement, as are recent announcements from Revolut, Paypal and BoursoBank. Revolut has announced that it aims to generate 30% of its revenues from its new "Revolut Media Solution" entity.
What's interesting is that the launch of Chase Media Solution is the fruit of a strategy put in place very early on, back in 2019. And the acquisition of Figg in 2022, a CLO platform, has given Chase all the capabilities needed to launch a Financial Media offering.
What is your vision for Paylead and the market in the years ahead?
From our point of view, today's pioneers will very likely be tomorrow's leaders, and the financial media network movement is only just beginning.
As an end customer, I'm always looking for more personalization, simplicity and support from my bank to ensure my financial well-being.
Banks, meanwhile, are facing stiff competition that is forcing them to reinvent their revenue models, while optimizing customer satisfaction. Advertisers, for their part, need to find effective solutions for building customer loyalty.
As co-founder of Paylead, I want to keep innovating. In addition to automatic cashback, we're preparing new services based on loyalty card integration, subscription management and so on.
In short, we're at the beginning of an exciting era, one that I can't wait to observe and influence!
Want to find out more about financial media networks? Contact our expert Marine Lecomte, Head of Offers and Innovations for Financial Services.