Voice of the Industry

Poland – a complete overview of payments and ecommerce trends and figures

Tuesday 25 May 2021 08:34 CET | Editor: Raluca Constantinescu | Voice of the industry

Janusz Diemko, with 20+ years of experience in payments, presents the key payments and ecommerce developments in Poland and elaborates on their role in the country’s path towards becoming an innovative payments market

Poland is a modern payments market in terms of bank and acquirer infrastructure, products, and services. It became 100% contactless recently, with a growing penetration of mobile payments, driven by banks on Apple Pay and Google Pay, and merchants embedding payments into their retail customer applications. Real-time payments in the guise of BLIK are driving growth in ecommerce non-card payments and are also simplifying payments across all channels. Consolidation of banks and acquirers has been significant over the last few years and has led to the top 5 banks/acquirers accounting for 80% of their respective markets. 

Innovation in the Polish payments market has continued to be on the rise over the last few years, across both issuance and acceptance. 

  • Poland can be said to be 100% contactless in issuance and acceptance with the majority of transactions, not only low value transactions (up to a PLN 100 – or EUR 22 – limit which may be doubled soon). Cashless transactions represented over 50% of the total volume in 2020. 

  • The government-sponsored Cashless Poland Program, which subsidises costs of POS hardware and merchant service charges for new merchants, has pushed the number of POS terminals to over 1 million – of which nearly 385,000 were subsidised. 

  • New SoftPOS pilot initiatives occurred over the last 18 months but have not taken off on a commercial basis yet. PIN on glass regulations or waiver for several providers should change this situation, but the level of consumer acceptance for entering a PIN on merchants’ screens on a non-POS device is not fully known. New fiscal regulations allowing for software-based fiscal ECR registers will lead to the implementation of all-in-one payment devices (fiscal ECR, sales system, payment on screen) – whether from payment providers/acquirers on dedicated hardware or software providers on standard tablets and phones. 

  • The increase in payments volumes via mobile phones may lead to POS/ECR-dedicated hardware being supplanted by all-in-one devices – card-based payments with PIN on glass or Face-to-Face (F2F) ecommerce payments without an NFC requirement. This could eventually lead to PISP payments with an easier customer interface disintermediating current payment methods at merchants. 

Issuance 

The major schemes in the country are Visa and Mastercard (approximately 52% and 47% market share, respectively), though American Express and Diners are present, with merchant acceptance of CUP, WeChat, and Alipay. 44 million cards were circulating in 2020 [split above], of which Polish banks [Bank Pekao S.A., Alior Bank S.A., and several small and cooperative banks] accounted for 45%. The major foreign banks that are present include Santander, BNP Paribas, ING, BCP-Millennium, mBank, Citibank, Crédit Agricole (Citibank announced the sale of its consumer operations, and Commerzbank called off its planned sale of mBank in 2020). NFC on mobile devices has mostly moved from host card emulation (HCE)/bank wallets to Apple Pay and Google Pay functionality (Garmin/Fitbit are also on the market). Other schemes and wallets such as mPay, SkyCash, YetiPay, Smoopay, and Billon (e-money) are minimally visible on the market. Paypal has been available for a long time, but it is mainly used to pay for goods from overseas merchants or by foreign customers on Polish sites. 

The major retailers are implementing payment methods (mainly cards/Google Pay/Apple Pay) embedded into their mobile applications as card-on-file (Allegro, Lidl, Zabka, Rossman), and user numbers of these applications are reaching millions. 

Poland’s settlement system is advanced, and real-time bank payments have been available for many years now. Looking at the last years, Blik represents a huge technical innovation, a code-based mobile payments system (owned by six top banks and now also Mastercard), similar to Zapp/Swish. It is used by 14 banks and 17 million customers, and it is available at 65% of ATMs and POS terminals and most online merchants. In terms of transactions by channel, ATM is 7%, POS 9%, P2P 9%, and ecommerce accounts for 75% – and it is growing significantly as the preferred payment method. According to the National Bank of Poland, when it comes to ecommerce, Blik is popular at the expense of pay-by-link (PBL – direct bank account payments such as iDEAL), as Blik is quicker, easier to use, and more secure (no confidential info transferred and authenticated through the consumer banking app). 

   

Acquiring 

The market is dominated by large pan-European acquirers such as NETS (highly acquisitive during the last two years – Przelewy24, Dotpay, eCard, Polskie ePłatności), First Data–Fiserv, EVO (PKO Bank Polski eService), Elavon, ING, SIBS–PayTel, Worldline – with domestic players represented only by Bank Pekao S.A. and ITCARD–Planet Pay. Banks are showing more interest in providing their own bundled acquiring offerings, and omnichannel is being provided by most acquirers through partnerships with ecommerce PSPs or through acquisitions (NETS or Bank Pekao S.A. acquiring a minority of the PSP called Tpay). 

POS terminal numbers have grown 500% over the last ten years, as there are approximately 1.2–1.5 million ECR systems on the market, and there is still room for further growth. Poland’s cashless programme is expected to continue for several more years in order to help drive this growth in new segments (government, vending, ecommerce), as cash continues to exhibit a downward trend in spend, and it is estimated to represent less than 50% of the total retail spend. 

The Buy Now Pay Later (BNPL) market continues to grow mainly in ecommerce, with Twisto, PayPo, and Revo Plus offering this functionality. 

EU regulatory initiatives 

SCA has been difficult to implement especially in the ecommerce space, and it is causing similar card abandonment problems for merchants as in other countries. The PSD2 standards for AISP and PISP services have been implemented – however, the use cases for these services are currently limited to AISP for account checking and customer scoring. The Polish API through the domestic clearing system of KIR is not yet fully functional for all banks and for PISP functionality. 

Ecommerce and marketplaces 

At the end of 2020, there were approximately 50,000 card merchants and 150,000 total merchants, and the market is growing at over 30% in terms of sales, approximately PLN 100 billion (EUR 22.2 billion) in 2020. Cards were never the most popular/significant ecommerce payment method, but they still accounted for approximately 18% – by transaction number and volumes at the end of Q2 2020. 

The COVID-19 pandemic sped up not only digitalisation across all sectors but also significant ecommerce growth in sales in 2020 across many segments, including food delivery. Cash-on-delivery has decreased significantly to less than 50% of the total share, and most courier companies have also implemented payments via POS at the time of delivery. Automated parcel lockers from InPost represent the favourite delivery method of Polish shoppers, and they also include the possibility to pay via card at the locker. 

Amazon entered Poland in 2021 but it faces significant competition from Allegro, the major incumbent (which successfully went public through an IPO in 2020), which could not be displaced by eBay so far. 

There are many other marketplaces in Poland: 

  • online – direct: OLX.pl, Morele.net, Facebook Marketplace, pl.AliExpress, Zalando.pl, eBay; 

  • online/offline: Empik, Carrefour; 

  • marketplaces redirecting to sellers: Allani.pl, Domodi.pl, Homebook.pl, Okazje.info, Google Shopping, Radar.wp.pl. 

The rise of electronic payments is driven by demographic changes (millennials’ propensity for mobile and contactless payments), the price to merchant with BLIK and PSD2 instruments driving down costs, and an improved consumer/user experience via BLIK and mobile payments. The cashless programme will continue to increase acceptance and is expected to drive significant terminal growth (of up to 500,000 new POS by 2022) – which coupled with 100% issuance/acceptance of contactless will drive usage across Poland in all segments (especially the area of smart city – transport, vending, parking). 

About Janusz Diemko 

Janusz Diemko is a CEO at several fintech startups and an active investor in fintech companies in Poland. He has over 20 years of experience in payments at Euronet, First Data, and Polskie ePłatności. He has worked in a variety of roles, from finance, business development, sales, and M&A to senior management/CEO roles and consulting across CEE, the Baltics, and CIS – in POS/ecommerce acquiring, card issuing, and ATMs. He holds Board positions at Ipopema, and he is an angel investor through startup funds and own investments.


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Keywords: ecommerce, real-time payments, Acquirer, POS, merchants, PISP, payment methods, mobile payments, BNPL, marketplace
Categories: Payments & Commerce | Online Payments
Countries: Poland
This article is part of category

Payments & Commerce