Bancontact is a Belgian business known for payment processing services, particularly electronic transactions. It’s the main card-based payment method in Belgium, established to facilitate smooth, secure financial transactions.
The business, founded in 1989 as Bancontact/Mister Cash, has become synonymous with debit card services in Belgium, offering reliable and widely accepted means for electronic money transfers. Bancontact merged with the payment service Payconiq Belgium in 2018 to form the Bancontact Payconiq Company, with the businesses consolidating their payment applications into one product, Payconiq by Bancontact. The app allows users to complete payments with smartphones, often using QR codes for a streamlined experience.
Bancontact has a strong local presence and dominates the Belgian market. Bancontact also collaborates with international payment networks, allowing for broader usability of its cards and services among local users and international travelers.
In terms of technical infrastructure, Bancontact operates on a network that supports real-time transaction processing for swift, reliable payments. This system is designed to handle a high volume of transactions, reflecting the widespread use of Bancontact services in Belgium and neighboring countries.
Below, we’ll talk through Bancontact’s offerings for businesses and customers as well as what businesses need to know about accepting Bancontact as a payment method.
What’s in this article?
- Where is Bancontact used?
- Who uses Bancontact?
- How Bancontact works
- Business benefits of accepting Bancontact
- Bancontact costs and fees
- Bancontact security measures
- Requirements for businesses to start accepting Bancontact payments
- Alternatives to Bancontact
Where is Bancontact used?
Bancontact, the dominant electronic payment method in Belgium, has a large geographical footprint. Though Bancontact is primarily used in its home country, its reach extends beyond the country’s borders, showcasing its growing popularity and adaptability to various market conditions and trends. Here’s a closer look at where it operates and the market forces at work:
Bancontact reigns supreme in Belgium. With over 17 million cards in circulation (compared with the country’s population of about 12 million), it’s the go-to payment method for online and offline purchases. This widespread adoption can be attributed to several factors:
Extensive bank network: Bancontact has partnerships with virtually all Belgian banks, making it accessible to the vast majority of the population.
Easy integration: Bancontact integrates effortlessly with banking infrastructure, making it a convenient and familiar option for customers.
Guaranteed payments: Transactions are confirmed immediately, offering businesses peace of mind and eliminating the risk of fraud or chargebacks.
Though Belgium remains its core market, Bancontact is actively expanding into other European countries, reflecting the growing demand for secure, user-friendly solutions.
Netherlands: Bancontact has established a strong presence in the Netherlands, particularly among online businesses. Its familiarity to Dutch customers, thanks to the country’s close cultural and economic ties with Belgium, has supported this growth.
Luxembourg: Bancontact has a growing presence in Luxembourg, primarily because of the high number of Belgian residents and cross-border workers.
France: Bancontact is making inroads into the French market, particularly in border regions. Its integration with popular French payment platforms is accelerating its adoption.
Bancontact’s expansion reflects broader trends in the payments industry:
Rise of ecommerce: The surge in online shopping has fueled the demand for convenient and secure online payment methods. Bancontact’s user-friendly interface and integration with major online platforms make it well suited to meet the moment.
Increased cross-border commerce: The growth of cross-border shopping in Europe creates opportunities for payment solutions that function smoothly across borders. Bancontact’s expansion into neighboring countries caters to this growing demand.
Customers’ preference for familiarity: Customers often prefer payment methods with which they feel comfortable and familiar. Bancontact’s focus on user friendliness and its close ties to banking systems fosters trust.
Bancontact’s expansion is also influenced by regulatory developments:
The European Union’s revised Payment Services Directive (PSD2): PSD2 promotes competition and innovation in the payments industry, creating opportunities for businesses such as Bancontact to increase market share.
Open banking initiatives: Open banking allows for secure data sharing between banks and third-party providers, which lets Bancontact offer innovative services and integrate with numerous platforms.
Outlook for the future
Bancontact is poised for further growth, driven by its strong Belgian base, strategic expansion into neighboring markets, and ability to adapt to evolving customer behavior and local regulations. By using its user-friendly interface, strong security features, and integration with leading payment platforms, Bancontact is positioned to become a major player in the European payments industry.
Bancontact is the dominant electronic payment method in Belgium and continues to grow, crossing the threshold of 2.3 billion payments in 2022, an increase of nearly 55% in a decade.
It is actively expanding into other European countries, particularly the Netherlands, Luxembourg, and France.
This expansion reflects the rise of ecommerce, increasing cross-border commerce, and customers’ preference for familiar payment methods.
Regulatory developments like PSD2 and open banking initiatives are also facilitating Bancontact’s growth.
Who uses Bancontact?
Though geographically concentrated in Belgium, Bancontact’s user base extends beyond national borders, encompassing diverse businesses and catering to specific customer segments. Here’s a rundown of who uses Bancontact and how they use it:
Types of businesses that use Bancontact
Retailers: Large chains and small independent shops across several sectors rely on Bancontact for online and in-store transactions. Its security and speed make it ideal for high-volume transactions, while being well known to Belgian customers fosters trust and satisfaction. As a case in point, major retailers such as Carrefour (with over 700 stores in Belgium) and Colruyt (with over 200 stores) have integrated Bancontact as a payment option.
Ecommerce platforms: Major online retailers such as Bol.com, the largest online retailer in the Netherlands, and Coolblue feature Bancontact as a payment option. Bol.com is immensely popular in Belgium, further solidifying Bancontact’s reach. This caters to the growing preference for online shopping and provides a familiar and convenient payment method for customers.
Subscription services: Businesses that offer recurring subscriptions, such as streaming services and utilities, find Bancontact’s recurring payment capabilities particularly valuable. Its mobile payment solution, Payconiq by Bancontact, further simplifies recurring payments and bill management. This ensures on-time payments and reduces the administrative burdens for businesses and customers.
Public services: Municipalities and government agencies have increasingly adopted Bancontact for online payments of taxes, fees, and more. This move toward digital payments promotes transparency, efficiency, and convenience for citizens, eliminating the need for manual or in-person payments.
Nonprofits and charities: Organizations soliciting donations and contributions use Bancontact for secure and convenient online giving. This simplifies the donation process for individuals and increases the likelihood of successful contributions. Bancontact’s integration with popular Belgian online donation platforms makes charitable giving accessible and efficient.
Customer segments that prefer Bancontact
Young adults: This tech-savvy generation embraces online transactions and favors familiar and easy-to-use payment methods. Bancontact’s mobile app and integration with online platforms resonate with their digital-first lifestyle.
Families: Parents appreciate the security and convenience of Bancontact, particularly for online purchases and bill payment. This allows them to manage their finances efficiently and safely. A survey by Bancontact revealed that 84% of parents feel more secure using Bancontact for online purchases compared with other payment methods.
Tech-averse individuals: For those less comfortable with technology, Bancontact offers a familiar and straightforward payment experience. Its well-established debit card and integration with banking systems provide comfort and ease of use, bridging the divide for users once hesitant to bank online.
Cross-border shoppers: People who live in neighboring countries such as the Netherlands and Luxembourg (which, along with Belgium, make up the Benelux economic union) often use Bancontact for online purchases from Belgian businesses. Easy cross-border transactions with customers’ preferred home payment method add convenience and flexibility.
Common use cases for Bancontact
Online shopping: From buying clothes and electronics to booking travel and ordering food, Bancontact facilitates a smooth and secure online shopping experience for customers.
In-store payments: Whether you’re buying groceries, paying for gas, or grabbing a coffee, Bancontact offers a convenient and contactless way to pay in physical stores. In 2022, more than 1.1 billion contactless payments were made using Bancontact, reflecting its growing popularity for in-store transactions.
Bill payments: Paying utilities, subscriptions, and other bills online is simple with Bancontact’s recurring payment features. This eliminates the need for paper bills and the possibility of late payments.
Money transfers: Sending and receiving money between individuals is quick and easy with Payconiq by Bancontact’s mobile app. This simplifies peer-to-peer payments and personal finance management. More than 275 million mobile payments were made in 2022 using the app, compared with 34 million in 2018, highlighting its growth.
Donations: Contributing to charities and supporting causes become more convenient with Bancontact’s integration with online donation platforms. This fosters a culture of giving and simplifies the process for individuals.
How Bancontact works
Bancontact is a huge part of daily financial activities in Belgium in many ways—it’s integrated into how many customers and businesses engage in regular financial actions. Here’s a closer look at how it works:
From the customers’ perspective
Online transactions: Customers select Bancontact at checkout and are redirected to their bank’s secure online banking environment. They log in and authorize the payment using their PIN, fingerprint, or facial recognition. After successfully authorizing the payment, they’re redirected to the business’s site. The business gets real-time payment confirmation and processes the transaction.
In-store payments: Customers use their contactless card or the Bancontact app on their smartphone at the payment terminal, which sends the payment request to the bank. After the bank confirms the transaction, the terminal displays a successful transaction message.
Using the mobile app: The Payconiq by Bancontact app facilitates contactless in-store payments, online purchases, money transfers, and setting up recurring bill payments.
What’s under the hood?
Online processing: Businesses use a Bancontact-provided payment gateway or another payment service provider (PSP). The gateway securely sends the payment to the bank. The bank employs 3D Secure (3DS) for identity verification and authorization. Afterward, STET, a clearing and settlement system, processes the payment.
In-store processing: Contactless payment terminals use near-field communication (NFC) technology to interact with contactless cards or smartphones. These terminals securely forward payment requests to the bank. Upon verification and authorization by the bank, the terminal completes the transaction, debiting funds from the customer’s account.
From the businesses’ perspective
Online: Businesses integrate a payment gateway with their online stores. This gateway manages communication with Bancontact and the bank. Real-time payment confirmation is provided, along with access to transaction data for reporting and reconciliation.
In stores: Businesses use contactless point-of-sale (POS) terminals connected to Bancontact’s network. These enable customers to make contactless payments easily. Daily transaction reports are available to businesses, with detailed data accessible through Bancontact’s online portal.
Technical infrastructure: Bancontact runs on an intricate network of servers, databases, and secure communication channels. This network provides reliable and secure interactions among businesses, banks, and customers. Security measures such as encryption, firewalls, and intrusion detection systems safeguard customer data.
Bancontact’s network ensures secure, efficient payment processing for a variety of transactions.
Customers have the flexibility to make payments through multiple channels: online, in store, and via mobile, each of which offers a secure and convenient way to manage financial transactions.
Businesses benefit from the ability to accept payments online and in store. They can easily integrate Bancontact into their payment systems, enhancing the customer experience and unifying transaction processing.
Business benefits of accepting Bancontact
Increased sales and revenue
Higher conversion rates: Bancontact’s widespread adoption in Belgium and user-friendliness lead to higher conversion rates during online and in-store checkouts. Bancontact’s payment methods captured 80% of the country’s market share in 2021, making it the leader in the country’s ecommerce environment.
Reduced cart abandonment: Speedy payment processing with Bancontact minimizes cart abandonment rates, so customers can complete purchases without friction.
Increased average order value: The convenience and security of Bancontact encourage customers to spend more, leading to increased average order values.
Enhanced customer satisfaction and loyalty
Improved customer experience: Bancontact’s familiarity, ease of use, and security provide a smooth and positive customer experience, fostering loyalty and repeat business.
Streamlined payment process: Bancontact’s real-time transaction processing provides for immediate confirmation and settlement, eliminating delays and minimizing frustrations for customers.
Reduced customer support inquiries: The user-friendly nature of Bancontact minimizes customer support needs related to payment issues, freeing up resources for businesses to focus on other important areas.
Operational efficiency and cost savings
Reduced administrative burden: Bancontact’s automated payment processing eliminates manual reconciliation tasks, saving businesses time and valuable resources.
Lower transaction fees: Bancontact offers competitive transaction fees compared with other payment methods, resulting in cost savings for businesses. Average transaction fees for Bancontact are 15% lower than the industry average for credit card processing, according to a study by Statista, a data analysis business.
Improved cash flow management: Real-time payment processing with Bancontact allows for immediate access to funds, allowing businesses to manage their cash flow more effectively.
Enhanced data insights: Bancontact provides businesses with detailed transaction data, allowing them to better understand customer behavior and improve marketing and sales strategies.
Improved security and fraud prevention: Bancontact uses advanced security measures such as two-factor authentication (2FA) and fraud detection systems, protecting businesses from financial losses because of fraudulent transactions.
Access to diverse customer segments: By offering Bancontact, businesses can tap into the vast base of Bancontact users, including tech-savvy young adults, families, and beyond, further expanding their customer reach and market share.
Cross-border expansion: The partnership with Payconiq has enabled businesses in neighboring countries such as the Netherlands and Luxembourg to accept Bancontact payments, facilitating cross-border expansion and boosting revenue.
Bancontact costs and fees
Here’s a breakdown of the costs and fees associated with using Bancontact:
Transaction fees: Though using Bancontact is typically free for customers, some banks may charge a transaction fee for online payments, typically €0.10 to €0.25.
Foreign exchange fees: When customers use Bancontact for cross-border transactions, additional fees may apply for currency conversion. These fees vary depending on the bank and the currency pair involved.
ATM withdrawal fees: Withdrawing cash from ATMs using a Bancontact card may incur fees depending on the bank and the ATM provider. These fees usually range from €0.50 to €2 per withdrawal.
Transaction fees: Businesses pay a set transaction fee for each payment processed through Bancontact in addition to a percentage of the transaction. These fees depend on the type of transaction, the payment gateway used, and the monthly transaction volume.
Minimum monthly fees: Some payment gateways charge a minimum monthly fee, regardless of the transaction volume. This fee can range from €10 to €50 per month.
Setup fees: Some providers charge a one-time setup fee for integrating Bancontact into a business’s payment system. These fees typically range from €50 to €250.
Hardware costs: Businesses accepting contactless payments must invest in compatible payment terminals. These terminals can range from €200 to €500.
Chargeback fees: If a customer initiates a chargeback on a Bancontact transaction, the business will incur a chargeback fee, typically €10 to €25.
Bancontact security measures
The payment method’s security features are on par with those of most modern payment systems and products. These features include:
PIN authentication: Every Bancontact card transaction, whether online or in store, requires PIN entry for authorization. This is a fundamental layer of security because the PIN is known only to the cardholder. The system locks the card after a predetermined number of incorrect PIN attempts, preventing unauthorized use.
3D Secure (3DS) for online transactions: Bancontact uses 3DS technology for online payments. This adds a layer of security by requiring additional authentication beyond card details. This could involve a password, a code sent via SMS, or biometric verification such as a fingerprint or facial recognition.
Encryption: Data transmitted during Bancontact transactions is encrypted. This means sensitive information such as card numbers and personal details are converted into a secure code, minimizing the risk of interception or fraud. The business’s encryption standards are in line with global financial security protocols.
PCI DSS compliance: Bancontact complies with the Payment Card Industry Data Security Standard (PCI DSS), a global set of security standards designed to ensure all businesses accept, process, store, or transmit credit card information securely. Regular audits and compliance checks make certain that Bancontact maintains these security controls.
Real-time fraud monitoring: Bancontact’s systems continuously monitor transactions for suspicious activity. This real-time monitoring helps in quickly identifying and preventing potential fraudulent transactions. Anomalies such as unusual spending patterns or locations can trigger alerts that hold a transaction for further verification.
Contactless transaction limits: Bancontact limits contactless transactions without entering a PIN to €25. If the amount exceeds that threshold, the system requires a PIN or another form of verification. This helps mitigate the risk in case of card loss or theft.
Secure mobile app: The Payconiq by Bancontact app includes security features such as app-specific PINs and biometric authentication. The app also allows users to track transactions, providing transparency and an additional check against unauthorized use.
Collaboration with banks and financial institutions: Bancontact works closely with banks and financial institutions to ensure alignment with their security measures and protocols. This collaboration creates a unified front against potential security threats in the payment environment.
Requirements for businesses to start accepting Bancontact payments
To accept payments with Bancontact, businesses must follow certain steps whether they’re based in Belgium or abroad. The process varies slightly depending on location and the payment processing systems they use. Here’s a breakdown of what’s needed:
For Belgian businesses based in Belgium
Merchant account setup: Businesses need a merchant account with a bank or a PSP that supports Bancontact transactions.
Payment terminal or POS integration: For physical stores, integrating Bancontact with existing POS systems or acquiring payment terminals that support Bancontact is necessary. These terminals should be capable of handling chip-and-PIN and contactless transactions.
Ecommerce integration: Online businesses must integrate Bancontact with their website’s payment gateway. This can be done through ecommerce platforms or through PSPs that support Bancontact as a payment option.
Compliance and security: Businesses must ensure compliance with PCI DSS and all other relevant security standards.
For foreign businesses
Partnering with a PSP: Foreign businesses should partner with a PSP that works with Bancontact and can handle cross-border transactions. This PSP should be able to facilitate currency conversion and maintain compliance with Belgian payment regulations.
Ecommerce integration: Just like Belgian businesses, foreign online retailers must integrate Bancontact into their payment systems. This often involves working with ecommerce platforms or PSPs that support international transactions with Bancontact.
Considerations for businesses that use Stripe
Stripe integration: Businesses that work with Stripe can easily add Bancontact as a payment method. Stripe supports Bancontact for one-time and recurring payments. The integration process involves adding Bancontact to the list of payment methods in the Stripe Dashboard or via application programming interface (API) integration.
Handling payments: Once integrated, Stripe handles the transaction processing. It facilitates the secure transfer of payment details and funds between the customer’s bank and the business’s account. Stripe also provides tools for managing transactions, refunds, and disputes.
Fees and pricing: The fees associated with processing Bancontact payments through Stripe vary based on factors such as transaction volume and location. Stripe offers transparent pricing models, and businesses should review these to understand the costs involved.
Here’s a breakdown of the key fees involved:
1.4% + 30¢ per successful transaction: This standard fee applies to all Bancontact payments processed through Stripe.
Additional fees for international transactions: Stripe charges a 1.5% fee for all international transactions.
Currency conversion fees
1% fee for currency conversion: Stripe automatically converts currencies at the prevailing market rate for a fee of 1% of the transaction value.
Businesses can choose to manage currency conversion themselves: This can be a more cost-effective option for businesses with a high volume of transactions. Stripe also offers special packages for high-volume or unique business models.
Other potential fees
Dispute fees: If a dispute arises regarding a transaction, Stripe may charge a fee to cover the cost of investigation.
PCI compliance fees: Businesses may incur additional fees for PCI compliance if their operations are not already in line with these standards.
Alternatives to Bancontact
Despite its strong position in the Belgian payments industry, Bancontact faces competition from several alternatives in each of its key markets. Here are some of the most well-known alternatives:
Credit cards: Visa and Mastercard remain widely accepted in Belgium, especially for larger purchases and online transactions.
Debit cards: Maestro and V PAY, which link with bank accounts, offer similar functionality to Bancontact but may have different fees and security features.
Digital wallets: Apple Pay and Google Pay offer contactless payment options through mobile devices.
Other online payment methods: PayPal, Klarna, and local bank-specific online payment platforms also provide alternative options for online purchases.
iDEAL: This popular online payment system dominates the Dutch market, capturing a 70% market share.
Credit cards: Visa and Mastercard have widespread acceptance for online and in-person purchases.
Debit cards: Maestro and V PAY are also relevant options, especially for in-store transactions.
Digital wallets: Apple Pay, Google Pay, and Samsung Pay are gaining traction for contactless payments.
Carte Bleue: This national debit card system is widely accepted across Luxembourg, where it also has high brand recognition.
Credit cards: Visa and Mastercard are readily available and broadly accepted for online and offline transactions.
Digital wallets: Apple Pay and Google Pay are increasingly used for contactless payments.
Payconiq: As Bancontact expands into neighboring countries, its partnership with Payconiq offers easy cross-border payments in Belgium, the Netherlands, and Luxembourg.
Other regional payment systems: As Bancontact expands further, it will need to compete with established regional payment systems, such as EPS in Austria and Giropay in Germany.