Polish Blik wants to conquer Europe with mobile payments

It is Poland’s most popular mobile payment method, which few people know is of Polish manufacture. Its owner is PSP company – a conglomerate of 6 Polish banks backed by Mastercard. Now it is worth €1 billion.

Mobile payments, i.e. using a phone, began to be discussed at the beginning of the previous decade. At that time, several banks in Poland already had mobile applications with which you could check your balance and even make a transfer to your account. But payments could not be made.

The idea of SIM card-based payment systems ultimately didn’t pan out because they were too difficult for customers to use. The IKO payment application, which PKO BP bank bought from the Swedish company Accumulate, was not easy either. Customers didn’t like it at first. Popularizing it in stores proved challenging because no one knew how to use it. The competition was the German-Polish iKasa, which entered Biedronka with payments. Bank Pekao SA, on the other hand, launched PeoPay, an application that uses a card system and QR-code authorization.

Beginnings of Blik

It was, therefore, a good thing that, on the initiative of PKO BP bank, six of Poland’s most prominent banks established the Polish Payment Standard (PSP) in July 2013. It was based on PKO BP’s solutions, which were valued at $7.5 mln. Bank Pekao SA was the only one among the large banks not to join the company. The service was renamed Blik and launched in February 2015. Initially, it was available at the 6 founding banks and, over time, at many others. Customers could pay at stationary and online stores without using a card and withdraw cash from an ATM using the 6-digit Blik code. In time, Bank Pekao SA also began using Blik. But not as a shareholder, but on the same terms as all other smaller banks.

When the EC decided that fees for non-cash card transactions must not exceed set limits, mobile payments, including Blik, lost their most significant asset: the low service cost. Contactless card payments soon became popular, which was another blow to Blik. While entering a 6-digit code in stores was competitive with traditional card payments because they required inserting into a terminal and entering a 4-digit PIN, contactless solutions were no longer.

That’s why Blik partnered with Mastercard, which in 2019 injected PLN 80+ million into PSP. It thus became the company’s 7th shareholder, and its valuation rose to PLN 600 million. The biggest benefit was that Blik could now be used globally. In 2023, its services were used by customers in more than 100 countries. Thanks to the Pandemic, PSP has established close cooperation with Allegro and online payment providers in Poland and worldwide. Blik is currently used by corporations such as Adyen, Stripe, Nuvei, Wordlline and Nexi Group.

Blik’s business model

It is based on transaction-related revenue that flows from banks and clearing agents, such as eService, Polskie ePłatności, PayU, Przelewy24, and has competitive rates. PSP is responsible for authorizing and settling transactions made by bank customers using mobile applications. Some especially offer Blik at stationary points or stores and on online platforms operated by agents. The latter is responsible for constructing offers for merchants providing Blik payments.

Blik’s strength is the diversity of supported channels. However, there have been times when it has had to chase the market, as with contactless, one-click or deferred payments. While in domestic services, Blik was able to make up for this, in global services, it was not necessarily. Before the pandemic, the technology was sold exclusively to a public service operator in the UAE, but it was not an own-brand implementation. It was only in 2023 that it could enter Slovakia and Romania with its services. Whether it can spread to other European countries remains an open question. Competitors include its Swedish counterpart, Swish, Spain’s Bizun and the European Payments Initiative (EPI) with its Wero system.

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