The German wholesale provider Metro was founded in 1964 and has 674 stores in 24 countries, most of them in Germany and France.
In 2021, Metro Financial Services (“Metro FS”) was founded as a 100% subsidiary of Metro Group. Metro FS launched a Mastercard Debit Card (without a bank account!) in partnership with Vodeno in 2022 and currently focuses on the German market. Typical customers of the Metro wholesale stores are restaurant owners, caterers and hoteliers, and Metro FS aims to onboard them to their card product. Today’s main benefit of the card is 1% cashback paid on every purchase made with the card, which is attractive for many but especially for business owners in the restaurant and hotel industries. Metro FS has already launched BNPL and is expected to offer other financial products.
A few weeks ago, the company announced that it had onboarded their 10,000 customer. It may not be the biggest number, but it’s an interesting milestone and according to Metro FS CEO Michael Zyber shows that there is a clear product-market fit.
Personally, I like the Embedded Finance story of Metro for several reasons:
- Metro is not a startup, not a technology company, but a 60-year publicly traded company. Often we speak about the stories of tech companies launching Embedded Finance products, but a company like Metro is different.
- The team has spent a good amount of time understanding their ideal clients and their needs. Instead of going for a standard bank account and debit card product, they realized that their customers wouldn’t give up their existing bank account since they would use that for cash pay-ins. Thus, Metro FS went for a detached debit card where each transaction is pulled via direct debit from their bank account.
- Metro has launched Metro Financial Services not purely because they wanted to offer financial products but because they realised they needed to increase touch points with their customers and understand them better. The Metro debit card can be used like any other MasterCard, and the card owner will receive 1% cashback for every purchase. Metro is likely not purely focused on earning as much money as possible from their card products but rather aims to understand the purchase and shopping behaviors of their customers better. Metro is likely better able to adjust and address customer needs when they know where customers are going for purchases.
I will continue to follow the Metro FS journey closely, as I believe this could develop into a role model for other similar companies.
