BLIK to challenge to market giants

The year 2020 will seal the company’s position as the number one payment instrument in Polish e-commerce – says Dariusz Mazurkiewicz, CEO at BLIK in interview for Business Insider Polska. Amongst the company’s priority directions, he mentions P2P money transfers with a mobile phone and contactless technology, which means competition with big techs.

There is a lot of discussion about how much the digitisation processes have accelerated in 2020. And what happened in the case of payments?

Dariusz Mazurkiewicz, CEO at BLIK: The COVID-19 pandemic has significantly sped up the trends we have seen over the past few years and considered in our strategy. They have created favourable conditions for the development of BLIK, which is a digital system of mobile payments. To start with, let me mention two driving forces, so powerful as the engines in Elon Musk's spaceship. One is the dynamic development of the e-commerce market in Poland, the other – the digitisation of the customer-bank processes, which can be seen in the increasing popularity of mobile banking in Poland, as one of the best in the world.

What seemed to involve long-term strategies for organisations suddenly turned out to be the only development path to follow, while for others even the matter of “to be or not to be”. If we have a look at e-commerce, a huge number of businesspeople have been faced with the choice of either closing their businesses or launching online stores. This brings benefits not only to BLIK, but also to such platforms as Allegro. In the event of financial services, the point is to provide good, advanced digital solutions, such as mobile banking. Online banking (e-banking) has already become classical interaction which does not allow for everything. Payment, for instance, is not as convenient as with BLIK.

I note that, at the dawn of the third decade of the 21st century, e-banking is regarded a little bit as “classical” banking.

Another important trend is the process of moving away from cash. This is not, by any means, about the physical hygiene of banknotes. This is about something more – this is about a social phenomenon. To square accounts with your friend, colleague, your child’s class treasurer or a person who is buying a gift for someone leaving a job, we no longer need to dig into our pockets or run to the nearest ATM, but instead you can do it online instantly and conveniently. During the pandemic, we have experienced such phenomena as shop sharing, doing the shopping for those who cannot or should not leave their home because of their age, which has consequently led to cashless settlement. Senior citizens are becoming increasingly adept at mobile banking. My thesis is as follows: the year 2020 has seen significant limitation of digital exclusion. Major players on the e-commerce market have passed their exams in this regard. The banks have also passed their exams by making their applications more and more intuitive. As a result, you do not have to be a geek to successfully deal with all of this. BLIK also helps to combat social exclusion by prioritising UX ever since its foundation.

Last but not least, the fourth trend, a very prospective one by the way, which shows the robustness and validity of our strategy: mobile contactless payments. The contactless technology has become even more popular and widespread. As in the case of moving away from cash, there is more to this issue than just the aspect of not having to insert your card into slots. There is no need to carry a wallet or a purse with the plastic inside, etc. Obviously, we have competitors in this area, such as the big techs – Google and Apple – but we have made a strategic choice: BLIK will go contactless in 2021.

To sum up, we have accelerated in 2020 and are well on track to develop even faster.

What challenges can we talk about in terms of changes on the payment market in 2020?

Think of security. In 2020, some people have done their first online shopping ever, made their first payment via BLIK, transferred their first amount of money via BLIK and got excited that it reached the recipient in no time at all, without even asking for a bank account number. This necessitates returning to the basic communication concerning safety and security. For years, while developing our digital channels and providing education in e-commerce, we have been moving forward hand in hand with the user community. We have started to make customers increasingly aware of how to behave on social networks, while using communication platforms – the threat remains high, as swindlers fraudulently pretend to be somebody the users know. And suddenly we had to make a stop and speak from scratch, in simple terms. “Make sure the store is not a sham business. This is how you can recognise it”. “You have got an e-mail. Please, double-check whether it has been sent by your bank”. “Do not click on the link and do not enter your login data”. The year 2020 has seen the “back to basics” approach in terms of security communication.

The year is not over yet, but what can we already say about BLIK’s results?

The growth rate will be very high. We will reach about half a billion transactions, compared with 217 million in 2019. I can say that the year 2020 will finally seal the company’s position as the number one payment instrument in Polish e-commerce, in a clear and unquestionable manner. While in 2019 it was debatable whether BLIK was as popular as the standard pay-by-links, i.e. electronic banking, now there will be no doubt when we show the 2020 data and the calculation of market shares. Our estimates suggest that we will exceed the 60 percent share in the payment volume in Polish e-commerce. It is a huge success of the Polish banking sector that it was able to develop solutions which represent the next generation following the distributed pay-by-link systems: a single coherent, secure and unique payment system based on mobile banking.

We will also be the first to show the significant scale of money transfers through mobile phones. The year 2020 has proven that this business is a hit. We ae convinced that winning the P2P on the Polish market will decide that we are the unquestionable number one in Europe in terms of mobile payment systems, of course taking into account the domestic ones. Very few markets in Europe have been able to develop a popular mobile payment system. Success has been achieved mainly by Nordic countries which are determined to move away from cash to such an extent that they even implement regulations imposing the obligation to use such mobile solutions/tools/systems etc.

What are BLIK’s plans for 2021 and the nearest future?

The founding fathers, and I’m thinking here about the first group of bank presidents who set up BLIK years ago, including the president Zbigniew Jagiełło, repeatedly expressed their ambition to make BLIK our national unicorn – that is a start-up worth over 1 billion dollars. I do not want to make any promises that this will happen in 2021. However, I have no hesitation is saying that, with the elements of our strategy in mind, we are well on the way to make this dream come true within a horizon of three years.

Europe needs fintech successes, innovative systems that could be a counterbalance to very extensive, scaled and advanced Asian systems, from Singapore, Hong Kong or China, where a lot of such innovations are created. This is exactly where the dividing line lies today. And there are brands emerging in Europe that are highly successful in trying to operate on a global scale.

What are your advantages that let you think about success on an international scale and effective rivalry with the big techs?

The model suggested by BLIK, which will hopefully be increasingly successful abroad, is based on customer-bank relationships, on mobile solutions of the banks that customers trust because they keep their money and savings there and, I hope, are satisfied with the services. This customer-bank relationship is crucial for us. We do not introduce any proprietary application as one of many players. Our model is unique. We have no doubt that the partnerships we are able to demonstrate in 2021 will help us broaden our ambitions beyond the Polish market. Klarna should not be the only fintech that develops itself from Europe (laughter). We see BLIK at least as big within 3 years’ time. We have loads of work in front of us. We may celebrate the 2020 results for a while, but we need to think forward all the time. There seems to be a multitude of trends in Europe that we can use while operating efficiently.

Can we talk about a feedback between BLIK and e-commerce, about reciprocal stimulation of development?

E-commerce is the future of trade and business, and we are particularly committed to technologies of the future. Our interests revolve around all transaction authorisation models that are interesting and safe for customers, and can help them find their bearings in the world of commerce. We also see and understand the QR technology, perceived by some as less advanced than the contactless one. Unfairly, by the way, as such a statement would very likely be ridiculed in Asia. Not everyone is awaiting contactless solutions there. However, we are sure that this is the best and safest technology in the context of retail trade. We are going to promote it and help Polish citizens understand it. To put it bluntly, we don’t want Apple and Google alone to be the sole providers of such knowledge, but also banks as part of their mobile banking solutions using the BLIK technology and the acceptance network of our partner MasterCard, on which our solution is based.

I believe that 2021 will bring plenty of important and awesome events on the e-commerce market in Poland and in Europe. We are going to see the effects of this considerable migration of sellers to e-commerce. Within a short time, major retail brands had to switch their strategies to e-commerce. The actual fruits of these activities are still to be seen. There is no going back to the pre-pandemic world and not even a single major brand on the market today assumes otherwise.

What pace of development is being considered?

If we translate the increases of twenty-odd percent on the British market, which is the most advanced in Europe, into the Polish market, we have a spectacular scenario for the years to come. E-commerce is not a fashionable add-on, but has now become the number-one strategy. In my opinion, sellers will be wondering whether they need the standard, physical trade at all or to what extent it should exist, to support e-commerce, and not whether to sell via the Internet. And this is a dream situation for BLIK, as our strategy has been based on e-commerce for 5 years. Obviously, it was the right choice. Today, we are focused on even greater acceleration of P2P mobile phone transfers and our intention is to explicitly demonstrate our strengths, together with banks, in the contactless technology.