Neobank aims to serve European freelancers

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Starting a new business as an entrepreneur or solopreneur can be difficult no matter where an individual is based, but in Europe business banking can be a nightmare as more established traditional lenders often overlook people who don’t have not the typical 9-5. worker profile or a regular monthly salary.

The frustration of dealing with these banks is one Alexandre Prot knows all too well and has been trying to resolve since he co-founded French neobank Qonto in April 2016.

In a recent interview with PYMNTS, he said the digital bank has been using the same three-ingredient “cocktail” to serve its 220,000 customers in four markets – France, Italy, Spain and Germany – since its launch, including the convenience of opening an online account 24/7 in 10 minutes and a “stellar” customer support team that responds within minutes, seven days a week, and within five different languages.

The offer is also centered on fairness and transparency, and the company ensures that all of their terms and conditions, including the 9 euro ($10) monthly fee and no-obligation policy, are clearly stated on the site. Neobank website for the avoidance of doubt.

“You can upgrade, downgrade or stop your subscription with just a few clicks, it’s all simple [with] no surprises and it’s exactly what our clients are looking for and in fact what any entrepreneur would be looking for,” explained Prot.

Related News: French neobank Qonto accelerates its European growth with a $550 million funding round

And so far, this business strategy seems to be working well for the Paris-based company. Earlier this year, the startup announced a €486 million ($552 million) Series D raise that took its valuation to €4.4 billion ($5 billion), one of largest ever made in France.

With this funding, Qonto has become the third French company and one of five to achieve unicorn status – companies valued at over $1 billion – less than a month into the year.

According to Prot, the startup was able to tick all the boxes of what it set out to achieve when it launched six years ago, and investors are confident in its potential to become a top player. in the regional payment space.

“We think Qonto has a bright future [and can] become the leading business financing solution for European freelancers and [small to medium-sized enterprises] SME, [reaching] 1 million customers by 2025,” he said.

Expense management

The French startup is also taking advantage of the opportunity to serve members of the booming gig economy market, although Prot said the aim is to move from standard checking account, bank cards and transfers to meet the cash flow and expense needs of large corporations. between five and 20 employees — with solutions around expense management and invoicing.

In terms of expense management, Qonto’s SME customers have access to physical, virtual or one-off cards that administrators or financial directors can, for example, offer to different sales managers, each with a different spending limit depending on their needs.

Prot said the ability to customize and scale spend allows companies to give their teams the right autonomy while maintaining a healthy level of control over their accounts and spending.

Additionally, customers are more efficient and save considerable time without having to fill out an Excel spreadsheet or scan expense receipts, making Qonto’s offering “a win-win-win solution” for employees, the financial management and accounting team.

“That’s really what we’re looking to do: to energize our clients by saving them the time, energy and frustration of managing their business finances,” he said. declared.

The banking license can wait

In July 2018, Qonto obtained a license from the French authorities to become a payment institution, and based on the company’s current goals and objectives, Prot stated that it had no intention of applying for a license. full banking so soon.

“We are really focused on serving our customers and prioritizing what makes the most sense for our next step, and that optimal next step is always to leverage our payment institution license to bring more services to our customers,” he explained, adding that moving to a different license is not necessarily helpful or of any additional value to customers.

He also pointed to the capital requirements and stringent conditions needed to qualify for a banking license as another thing to keep in mind and an additional reason why the company decided it was best to allocate its assets and funds in a way that is beneficial to the growth of the business.

And they’re not missing much, he said, as the neobank has leveraged partnerships and integrations to offer additional products such as credit services to its customers.

Moreover, thanks to European regulations, Prot added that the company’s current license can be passported throughout Europe, which facilitates the penetration of other markets in the region and more easily achieves its objective of reaching 1 million customers in the region by 2025.

Overall, the goal is to ensure that no matter where its customers are based, they receive a localized service that meets their needs, whether through Qonto’s integration with national tax offices or by working with the right local accounting partners in each country.

“What we see is that 80% of the needs, 80% of the product [and] 80% of the service is the same in different markets, but because we really want to provide the best service to our customers, we go the extra mile to add the remaining 20% ​​of localization to ensure we provide the best value. to our customers [regardless of the country they’re based in],” he said.

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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICE IN THE DIGITAL ENVIRONMENT

On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.

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