Carrefour : “The growing complexity of the payment chain is underestimated”

How does a global retail Group (turnover: €81.2 billion in 2021), selling in more than 30 countries, adapt to the continuous changes in payment methods? What are the Carrefour group's priorities for 2022 ? A look at the challenges for Lionel Jouve, the Carrefour group's Director of electronic payments and payment methods.

Through Sophie Baqué. Published on 13 June 2022 à 17h06 - Update on 21 October 2022 à 21h32

As Director of Electronic Payments and Means of Payment for the global Carrefour group, what are your challenges?

Lionel Jouve : I have five major points. Primarily, I am concerned about the security of transactions. We tend to forget this, but it is crucial. The bank card is the most widely used means of payment in our points of sale and on our e-commerce sites. Fraud remains significant, not in terms of amount but in terms of frequency. The second challenge, which is unavoidable in a world where immediacy is everywhere, is to ensure that payment methods contribute to a seamless customer experience. We are constantly thinking about how to save time for our customers: checkouts reserved for bank cards and for holders of the Pass card, our loyalty card. Which brings me to the third point of loyalty. Consumers do not just want to go fast; they want to be recognised. It is also in our interest to know them better. This rapprochement between electronic payments and marketing, which began 20 years ago, has accelerated, as shown by the examples of WeChat and Alipay in China.

Another imperative has emerged with containment and even more so with inflation: fractional payment. This is an update of an old practice. The practice of staggering the cashing of cheques on certain dates. But in the context of current price increases (editor’s note: up by 4.8% in France in April, over one year, according to the INSEE, i.e., the strongest increase since 1985), consumers are keen to use a micro-credit formula that allows them to spread spending. This evolution towards Buy Now Pay Later (BNPL) is a major trend.

And the multiplication of means of payment?

Lionel Jouve : This is a major challenge, the fifth in my view. We must adapt to the rapid evolution of payment methods, but with pragmatism and caution. Days when transactions were settled in cash are long gone. Today, we must rely on the intervention of several players (payment service providers), for instant and secure connections with banks. The growing complexity of the payment chain is underestimated.

As a world leaders in food retailing, Carrefour (editor’s note: also present in B2B with Promocash, or Atacadão and in B2B2C), cannot throw itself headlong into all the solutions that are emerging. These are significant investments. I have a simple example. If we change a standard receipt printer, we must multiply the cost by the number of points of sale. We have 12,000 within the Carrefour group.

On the web, on mobile, contactless… Over the last 20 years, payment methods have undergone major changes. How can we take all these changes into account?

Lionel Jouve : In 20 years, the traditional model has burst the bars of players “natively” in charge of payment methods. In 1959, American Express launched the first plastic bank card. In 1998, PayPal, which has become the leader in online payments, was created in the United States. Until then, we had players who naturally fell within our sphere of operation. This is no longer true today. The whole ecosystem has been turned upside down by the arrival of fresh players. Alipay, Apple Pay, Google Pay. This requires us, as merchants, to be more adaptable to deal with the acceleration of change and the evolution of the parties involved alongside their technologies.

What are your priorities for 2022?

Lionel Jouve : One of our major areas of focus is the smoothness of a customer journey. In November 2021, we launched the first Carrefour Flash, on Rue Parmentier in Paris, which allows customers to shop without scanning products in less than 10 minutes. The checkout is fully automated via sensors installed on the shelves. We know what you have put in the basket. Payment itself is part of the process. We are thinking about how to ensure that, whatever the case (urban formats or stores on a city fringe, for example), the checkout is no longer a barrier to speed. Various constraints must be considered: How to capture items for large trolleys, in large areas? How to make several checkout systems coexist (traditional checkouts, automatic checkouts or a shower in the case of Scan & Shop). Not to mention Wi-Fi coverage, which is essential for all points of sale.

More retailers are offering customers an option for paying at the point of sale. Staff have mobile terminals. Are you testing this formula?

Lionel Jouve : Yes, Carrefour is working in various countries. In France, we are testing what we call Smart POS, intelligent payment terminals. Unlike the “classic” bank card readers stuck to the checkouts, these terminals are in the form of a tablet. They have multiple applications (Android – iOS) and capable of carrying out various operations  like recognising loyalty cards, accepting coupons, scanning barcodes or registering parcels at reception. They can, for example, allow you to pay via contactless with your mobile device. 

In the longer term, do you think cryptocurrencies will have a place in retail?

Lionel Jouve : Carrefour has already invested in Metavers and cryptocurrencies. In January 2022, the group acquired a virtual land in the Metavers from the company Sandbox located at 33.147. Since then, we have launched NFBEE Supermarket the operation to support the preservation of bees which results in the sale of NFTs (Non Fungible Token), virtual bees, drawn on computer and called NFBEEs (Bee for bee). This action in favour of biodiversity, carried out within the framework of our Act For Food commitments, allows us to collect funds in cryptocurrency (1 NFBEEs= 5 Sand =15 euros) to be donated to the Fondation de France which works for biodiversity (via Beefund).

How are NFTs received by consumers? 

Lionel Jouve : Our aim is twofold: firstly, to continue to raise our customers’ awareness of biodiversity and secondly, to familiarise the public with this innovative technology. It has been a success. We have just launched two auctions (drops). All the NFBEEs were sold out. Will consumers rush to buy milk tomorrow in cryptocurrencies? We should not expect a crypto tidal wave at our checkouts. However, everything that comes with cryptocurrencies, this new wave of blockchain-related technologies (Web 3.0, NFT, Metaverses) will have a positive impact on financial exchanges and transactions. It will give rise to “Decentralised Finance”, which is what the new acronym “DeFi” stands for. As a detail, I have a personal anecdote to summarise the issue. Three years ago, I drank coffee paid for in crypto. The transaction cost more than the coffee! That is how much remains to be done from a retailer’s point of view.

Is there more of a future for mobile phone payments?

Lionel Jouve : We are working hard on contactless payment. We accept several wallets (mobile wallets), whether it is Apple Pay, Google Pay or Samsung Pay. The share of mobile phones and contactless in electronic payments is still low, although it is growing. Wallets are still far from dethroning the good old plastic bank card. Despite an increase during Covid-19, some consumers are still afraid of contactless fraud on their mobiles, despite the widespread use of strong authentication.

Automatic distribution is developing (pizza, snacking, etc.). How can you integrate it into your strategy?

Lionel Jouve : Automat, vending machine, at the end of the day, are always boxes that capture information from the bank card. We must adapt to this protean environment. These systems multiply the sales channels, creating additional constraints. Petrol pumps, for example, are subject to specific rules in terms of authorisations! Before you can fill up, your bank card is imprinted to secure the payment. All of this is done without any real transparency for the customer, who is sometimes blocked because they exceed the authorised limits. 

Is having a banking subsidiary (Carrefour Pass) an asset?

Lionel Jouve : It is a real asset when this banking subsidiary offers both a loyalty card and a payment card, as is the case with the Carrefour Pass card. This allows us to offer financial services to our member customers (payment facilities, savings products, insurance, etc.) and to have better customer knowledge. We can personalise our offers while rewarding loyalty. As a reminder, Carrefour scrupulously respects the European Data Protection Regulation (RGPD applied since May 2018), which requires any merchant in the European zone not to keep or communicate personal data. In addition, the global electronic payment industry has developed a tokenisation system (allocation of a unique number per cardholder and per merchant) so that the 13 digits of the bank card no longer appear. These two elements have had an impact as the company has lost a strategic source of data on customer behaviour. This is protective of our personal data but limits our personalisation offers. Thanks to the loyalty card and the consent (opt in) given by its holder, Carrefour can weave a finer knowledge of its customer’s needs.

Several texts are under discussion in Brussels which should once again modify the digital finance landscape, such as MiCA (Regulation on cryptoasset markets) and DORA (Regulation on the digital operational resilience of the financial sector). Will adoption have an impact on your business?

Lionel Jouve : We will be indirectly affected. It is an issue followed by the French Association of Corporate Treasurers (AFTE) of which I am a member. The Americans are pushing for the adoption of (their) crypto assets. The Europeans are in favour of regulation and point out the risks of speculation, as Christine Lagarde, President of the European Central Bank, does. Certainly, it is necessary to inform the public to break the clichés. The first one, which is tenacious, lies in the belief that investing in cryptoassets ensures unlimited and risk-free gains; this is false and dangerous. Similarly, to think that these operations would allow untraceable transactions (such as money laundering) is to ignore the mechanisms of the blockchain.