A big part of why we are doing our Build a Bank trips is to check our expectations and learn. Nowhere did this happen with such stark results as in Poland. We always knew Poland was a big market, with a population of almost 40 million, but we also considered it as one that was still developing, something to look at for the future. How wrong we were.
My first preconceptions were dismissed as soon as we reached the border. People everywhere were telling me stories of Polish roads, leaving me to expect the Land Rover would finally be presented with challenges suitable for its calibre. I had grown weary of German autobahns in a vehicle more suited for 50 centimetres of rushing river, rather than rushing Beemers on asphalt. However the only thing that changed upon crossing the border was the language, to one more heavily based on consonants, and the improved quality of asphalt. Yes, that’s right, improved. A brand new, utterly flat and straight motorway had been built right to the border, as if to show the Germans that two can play at that game.
It was in Poznan, amongst a pick of the Polish startup scene, where we were first informed of how developed the Polish banking and payment scene is. We were understandably skeptical, putting it down to the usual nationalistic hyperbole, but this time that skepticism was unfounded.
The claims got repeated once we had made our way towards Gdansk in the North. After a great oldskool computer party, Sillyventure, we had our real Build a Bank workshop. Pawel Banaszak had done an amazing job of putting together a great gathering of people from different backgrounds, both from startups and financial backgrounds. The problems people were having in banks were very similar to elsewhere in Europe, but I really want to highlight some of the great opportunities in Poland.
While others talk of NFC, Poland does it. There are over 15 million NFC-enabled cards in Poland, with the number increasing to 20 million in the next 2 years. 170K locations accept contactless payments. Check this report.
Card use is high. At the same time card fees are also high, but fraud is apparently low. I’ve been told there is a certain willingness to happily pay what is asked, so there might be opportunities for new players to enter the market with reduced fees and a good approach. Fees from credit card acquirers are between 2.5–3%. Payment companies might then add more on top. The high fees have really been the main limitation to wider spread in card acceptance at some grocery stores and small shops.
The banking environment is very competitive. We walked down the main street of a smaller town, Suwalki. Within 500 metres there must have been 20 different banks, aggressively competing with each other. This competition means there is a lot of push for innovation. mBank, one of the first banks to originally be purely online, was for instance presenting a highly regarded new user interface at Finovate Europe, just a few weeks ago.
Online payments are common. Forget about cheques. Bank-to-bank transfers are the way to do things in Poland. It was pleasing to find that even direct debit is not that common. I prefer bank-to-bank transfer myself for control and simplicity, although it is surprisingly uncommon — possibly due to poor interfaces. Online purchases are also made in a similar manner.
Customer reconciliation is easy. Poland uses reference numbers in their bills, like many other places. But what the banks have done goes beyond that and they offer corporate clients the ability to create per-customer IBANs that they can issue themselves. The brilliance and usefulness of this cannot be overstated.
Really the only thing Poland has going against it is not being part of the Eurozone. Yes, I know the euro has gained a lot of bad flack recently, but honestly, it makes cross-border life and expansion at least feasible. We cry internally at Holvi when thinking about the Nordics (each country has a different currency, with only Finland being in the Eurozone). Poland is planning to join, though: best be prepared.
So, with everything we learnt over just a few days, I would have to say that Poland has gone from an interesting future potential, to a market that must now be given serious consideration.