Kingfisher France Targets Big Baskets with BNP Paribas’ Unique A2A Payments Solution

When Europe-wide retailer Kingfisher Group wanted to find a way for higher-spending customers of its Castorama and Brico Dépôt retail home-improvement outlets in France to pay for their goods, BNP Paribas responded with a unique instant Account-to-Account payments solution. Antoine Leclercq, Cash Manager, Castorama France, and Saïd Ouastani, Global Cash Management Relationship Manager, BNP Paribas, explain this shopping revolution.

Customers of two of France’s leading home improvement merchants, Castorama and Brico Dépôt, who undertake more involved domestic projects – such as kitchen or bathroom refits – often have high value baskets.

While cards represent the predominant means of payment in these shops, customers who are working on those bigger projects often find that their credit limits are quickly reached. This is frustrating for the customer and for the shop.

Cheques are sometimes used, but these are expensive and slow to process, and are a risk for the seller. Cash payment for a typical large project basket is simply inconvenient. Often the only way to ensure the funds are available is via a convoluted and time-consuming wire transfer process. This creates a back-office headache for Kingfisher’s French entities, and often acts as a purchasing disincentive for the customer.

Working with its banking partner BNP Paribas, the Kingfisher team in France found a remedy that it has now deployed across all 228 in-country shops. And, according to feedback so far, customers and sales staff thoroughly approve.

Saïd Ouastani
Global Cash Management Relationship Manager, BNP Paribas

Finding the answer

The solution has its roots in the regulatory changes of PSD2 that paved the way for open banking, the roll-out of banking APIs, and the arrival of SEPA Instant Payments. These combine with emerging account-to-account (A2A) payment capabilities. For all its apparent complexity, BNP Paribas and Kingfisher have created a solution that ultimately simplifies and enhances the payments experience for all parties.

The conversations around how best to take payments from the bigger-basket shopper in Kingfisher’s stores started in early 2020, recalls Ouastani. At the time, the successful solution was still on the drawing board, he confirms.

Then in March 2021, BNP Paribas announced the launch of its Instanea real-time payments platform, in partnership with open banking payments solution vendor, Token. This joint initiative heralded the arrival of a new way for the bank’s merchant customers across Europe to improve their customers’ payment experience. “We maintained regular discussions with Kingfisher about their challenges, and with the arrival of Instanea we could immediately see how it would meet their requirements,” says Ouastani.

Instanea is an instant payments initiation solution. It easily integrates with multiple payments channels to deliver immediate settlement. The concept is centred on delivering A2A capabilities, enhancing the speed and increasing the security of transactions for merchants and customers. It also means common card-payments risks, like chargebacks, are now eliminated because each payment is irrevocable, being securely and instantly authenticated by the customer in their own banking portal.

A2A in action

When a purchase is made, the shop sets up the payment process, using the customer’s preferred contact tool, including email, text, and instant messaging apps such as WhatsApp. To facilitate this, the services of third-party middleware vendor, Paytweak, are employed.

A “strong partnership” already existed between BNP Paribas and Paytweak, says the firm’s CEO, Thierry Meimoun. With Kingfisher connected to Instanea, Paytweak’s project team was fully involved in the implementation and integration of the solution with the merchant’s own systems, he reports. The project was deployed onsite and was live in a matter of days.

Thierry Meimoun
CEO Paytweak

“Now, as the gateway between BNP Paribas, Kingfisher and its customers, we are able to trigger the payments and provide reports, integrating these directly with the merchant’s financial systems, ultimately ensuring the customer experience is fast, smooth and secure,” he says.

Paytweak’s platform (which is offered in 11 languages) uses customer and sales data to automatically generate a one-click secure payments link to BNP Paribas’ Instanea, which it sends to the customer. The message incorporates the transaction details alongside additional valuable customer data. It also includes an innovative unique transaction identifier code.

Upon receipt of this message, the customer accesses Instanea where they choose their online bank. They are redirected to that bank to validate the details and then authorise the payment. The customer’s bank initiates several checks, such as sufficient funds availability either in the customer’s account or through their approved overdraft facility. If all is well, the bank  proceeds with the irrevocable instant payment from the customer’s bank account to the relevant Kingfisher BNP Paribas account.

Kingfisher receives instant notification of the payment action, along with all the relevant transactional data and the unique identifier. Paytweak simultaneously notifies the shop of the receipt of its customer’s funds, the shop is then able to release the goods. The entire round trip for this to happen takes just a few seconds. As Meimoun says, “from start to finish, this is a near real-time experience”.

Collaborative approach

“We chose the solution as one that is both agile and fast,” comments Castorama’s Leclercq on the programme’s roll-out. Having explored the key connectivity, security, user experience, and contractual elements, within six months of gaining the green light for what was essentially a pilot programme, all Kingfisher shops in France were live.

Payments via the solution are now being handled with similar ease. Indeed, point-of-sale personnel are now even using mobile devices connected to a central system, enabling them to initiate and finalise customer transactions while still on the shop floor, bypassing the traditional checkout desks.

“This is a totally new means of payment,” enthuses Leclercq. “We are the first retailer to put this on the shop floor.” The fact that both the roll-out and the live use of the system have the qualities of speed and agility is no accident, he adds. Indeed, both Kingfisher and BNP Paribas worked closely to define and develop this innovative customer payments experience.

“It was truly a joint project. At the beginning we had a discussion about Instanea, with BNP Paribas looking for partners to test this new platform,” recalls Leclercq. “We were really happy to be involved; this was a fitting solution for the challenges we had identified, and we quickly agreed to work and learn together, discovering the solution’s capabilities.”

Fortnightly and then monthly meetings between the operations teams of Castorama and Brico Dépôt, and the technical teams from BNP Paribas and Paytweak, were timetabled to ensure early identification and resolution of potential challenges. “It was a well-managed project with a clear connection between all parties,” states Leclercq.

Working for the win 

Although the project was established under pilot scheme protocols, it is clear that the initial discussions involving all teams ensured relatively smooth progress. The rapid pilot deployment gave Kingfisher the ability to quickly validate the reliability of the set up, and to have comparable data throughout its network, notes Leclercq. “We wanted to address various difficulties for high-value baskets, and here the pilot has clearly met our expectations.”

There were some issues to be resolved, he notes, but none were show-stoppers. “It’s a new means of payment, and in the wider payments space, for example, the range of daily spending limits imposed by different customer bank accounts has not been fully standardised,” he comments. So while most customers know their credit card limits, few know their bank account’s per-transaction transfer limit. This means that occasionally shop staff have to try processing different amounts until that threshold is discovered.

Of course, shop staff will learn to recognise the limits for different types of bank account. In the longer term though, this is the type of issue that any new system will likely face when coming up against rules designed for legacy systems and processes. As new payments models such as A2A gather momentum, so the rules supporting them will mature. It is certainly not seen as a long-term problem by Kingfisher, the lack of any issue of substance throughout the project far outweighing any such short-term inconvenience.

One aspect of the new payments programme that has immediately added significant value for Kingfisher is the improvement to its reconciliations process. The unique identifier auto-generated by Paytweak travels end-to-end with every payment. When funds hit a Kingfisher bank account, all identifiers are incorporated within the following bank statement from BNP Paribas. This enables Kingfisher’s back-office team to fully automate reconciliations for these transactions.

All-round success

Despite being a new concept, the process from discovery to delivery has been a success, says Leclercq. “The sales staff in the shops are very pleased with the solution; it’s easy to use, it’s GDPR-compliant, and it helps their customers. The back-office team are really happy too,” he confirms.

The pilot phase over, Kingfisher in France is now seeking to expand the use of the solution by customers. It is also exploring ways of incorporating it into its web sales platform. The notion of instant refunds to customers has also been mooted by BNP Paribas, fully leveraging the flexibility, speed, and agility of the platform. For now though, Kingfisher’s customers can get on with their DIY projects, unhindered by outdated payments processes.