The Belgian financial sector as a leader in electronic payments

Within Europe, the Belgian financial sector has always been a leader when it comes to innovative payment systems. It is not just the fact that SWIFT, Euroclear and the Bank of New York Mellon, three pillars of the international payment architecture, have their headquarters here. For years Belgian banks have also been trendsetters in the development of products that lead consumers towards electronic payments.

The highly competitive Belgian banking market pushed the financial institutions forward and encouraged them to develop innovative products. As previously discussed, Belgian banks can today call on the most balanced distribution models in Europe, with their brick (an extensive network of branches) and click (a highly developed model for electronic banking) approach. (See also What is a diversified banking landscape?).

Belgian banks are not only among the leaders in Europe in terms of the number of branches per thousand inhabitants; they have also joined Europe’s leading group in terms of infrastructure for electronic payments. Furthermore, Belgian banks also appear to offer their customers this “best of both worlds” model at a relatively low price.

Nevertheless, there remain many challenges for Belgian banks in the field of electronic payments. In the past, the Belgian financial sector played a pioneering role. This resulted in such things as the launch of Proton, the electronic wallet with which small payments can be made but which does not require a code or signature. Proton was launched in 1995 and is one of the best known examples of innovation in electronic payments. The establishment of Bancontact/Mister Cash is another fine example of an innovation in electronic banking that conquered the world from Belgium.

However, the quality service that is offered to the consumer requires continuous innovation and investment, and these may have been lacking somewhat in recent years. As a result, the Belgian financial sector risks losing ground to the leaders in terms of the number of payments by debit card or the number of online purchases. Countries such as Denmark and Sweden, but also France or the Netherlands, are doing much better in both areas.