The Polish payment landscape: a modern payments approach

The payment market in Poland features both conventional practices such as cash, which still goes on as one of the most widely used payment options, and innovation. Read on to learn more about the status quo, as well as about innovation and Poland’s future vision.

The key features of Poland’s payment landscape

Poland is located in the heart of Europe, along important communication links. The economy is Europe’s sixth largest and the former Eastern bloc’s fastest expanding. The population exceeds 38.5 million people. When discussing the payment landscape, it is worth noting that the Polish financial sector is a very “young” one, having begun its most rapid growth between 1995 and 2000. Its strategy and rapid growth in digital and mobile payments might be considered as modern and inventive. In the previous several years, Polish banks have made significant efforts to enhance the relevance of digital channel usage (for retail, SME, corporate customers, and so on). Customer-centricity and the enhancement of Customer Experience (CX)/User Experience (UX) through remote channels also helped. According to Deloitte’s global 2021 benchmarking report, Polish banks are among the top ten percent best-in-class for digital banking. The whole banking sector in Poland is also committed to a cashless and paperless strategy, which is evident in its daily banking operations. According to statistics, there are 21 million online banking users; 16 million of them additionally utilize mobile apps, and 10 million apply BLIK, the local mobile banking system.

Polish mobile solution 

In Poland, BLIK is at the moment the most widely used mobile payments app. The technology is mostly utilized for online purchases, but its most recent upgrade, BLIK Contactless, enables users to pay at points of sale. In 2015, the six main local banking institutions formed a joint venture, which gave rise to the notion of creating a mobile solution. It was once viewed as a “exotic” option for young and digital users, but as a result of its superior user experience, significant market engagement, and capacity to accommodate emerging eCommerce trends, the system has rapidly increased the number of users in its user base. The stats speak for this platform: more than 10 million consumers utilized this method in QI 2022. One of BLIK’s main benefits is the user interface. A 6-digit one-time password (OTP) must be entered in order to start the process. The user’s bank’s mobile app generates this OTP, which is only valid for two minutes. Everything about the process is quick, easy, and most essentially, secure. BLIK is anticipated to capture the EU market soon.

How the payment ecosystem may change in Poland during the next five years

There are three trends that Polish banks believe are crucial: open banking, open data, and open finance. These trends are crucial now and will continue to be so in the future. However, the strategies of the industry’s top players are heavily focused on data science, automation, robotics, and AI. Cloud computing is another important topic in Poland. The “path to the cloud” for the banks has begun. The banking industry as a whole is striving to adapt itself with the highest standards of cybersecurity, but the biggest problem is cybersecurity. The Polish banking system will have less cash and paper money in five years (we will transition to a “cashless society”), be much more proximate to customers, and be able to serve them more quickly, conveniently, and promptly. 

The Instant Credit Transfer protocol

Instant payments are getting more and more common in Poland, which is also a consequence of their application growing significantly through mobile apps. Express Elixir, (based on Polish Zloty or PLN) an example of such system, doubles its transactions every year (approx. a 100% growth), reaching 19.5 million payment operations in June 2022 (10.73% of them — the primary retail payment system in Poland—in that month). 

The Express Elixir system’s operator, KIR SA, created a solution dubbed Euro Express Elixir that complies with the scheme in terms of scheme adherence. This solution is prepared for use and connected to the TARGET Instant Payment Settlement (TIPS) testing environment. Banks signed letters of intent to join Euro Express Elixir first, and are currently prepared to join the solution and thereafter adhere to the program, according to KIR SA.

One of the major problems, according to previous reports, was Europe’s lack of rapid payment system compatibility, which led to its limited use. As you may already be aware, Poland has a batch-based compliant solution known as Euro Elixir that supports sending international payments in EUR and is hence regarded as the primary payment method. We anticipate more activity in the coming period (i.e., those currently engaged in the implementation process with KIR SA will hopefully start their production mode) and further growth beyond. This is because interoperability issues now appear to be resolved and new use cases for instant payment operations are emerging.