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Will Bakers replace Bankers?

Categories : Uncategorized
April 22, 2016
Tags : Retailers, Technology, Universality
New app enables customers to open an account with their local shop.
Guillaume Lepecq

This morning, I went to my local bakery to buy a baguette. French bakeries are often pictured as very traditional shops, with a beret-wearing baker behind the counter. In my case, the bakery has a contemporary design, good service and it sells bread, sandwiches, snacks and some pretty good cakes.  I would definitely recommend them for their bread and pastries, but I would never have considered them a financial services provider; at least, not until this morning.

As I walked into the store, a hipster greeted me – with two typically hipster accessories – a beard and an iPad. “Would you like to open an account with your baker?” he asked while showing me the app[1] which uses fancy graphics to display all the benefits related to banking with my baker.

For the consumer, the benefits are threefold: no need to carry change; loyalty programme benefits and discounts; support your local business.  The loyalty part is of course the main value proposition; the hipster sales person was offering a 10% discount for a deposit of € 50.  A month ago, I received a letter from my bank indicating that from now on they would charge a quarterly fee for holding my money.  For the merchant, the benefits also come in threes: a loyalty programme; an efficient payment method that increases revenue; a communication tool.

Of course, all this is not entirely new. I have been using a pre-paid card at the dry-cleaners for years. I also have a tab at my local pub. And in 2014, Starbucks accumulated $ 1.4 billion on its pre-paid cards. The main difference here is the terminology; the customer is opening an account.  Of course, smartphone-based technology is certainly trendier than card-based products. But apps have also been around for quite some time. Interestingly, the system can be loaded with cards, cash, cheques and lunch vouchers, which are very common in France.

At a time when banks are closing branches all over Europe and bank fees are on the rise, I wonder whether we might see an increase in these types of accounts. Cash automation technology as well as cash-back could enable a store to distribute cash as well. In any, case, I will not be buying a baguette at the bank.


[1] The app is managed by a young startup called Les Habitues which translates into the locals. The website is available in French only