What happened: The French SME neobank has launched an embedded banking offering. There is no official announcement (yet), but the offering is described on Qonto’s website (Qonto). The website also features several French businesses, mostly in the accounting and legal space, as the first partners. The service is available in eight countries: France, Germany, Italy, Spain, Portugal, the Netherlands, Belgium, and Austria.
My comment: This is a very interesting move, as Qonto now competes directly with various European banking-as-a-service providers. It seems that Qonto wants to position itself as a simpler option than the traditional banking-as-a-service providers (e.g., highlighting an integration in two to four weeks) that takes care of much of the overhead (e.g., Qonto customer support). And this is the crucial point: when a partner embeds Qonto, its customers get a normal Qonto payment account, which they can access via the partner’s or Qonto’s website. This is totally different to a “traditional” banking-as-a-service provider’s offering, where only the partner can offer these banking features.
This brings us to the question: Is this directly competing with the standard banking-as-a-service provider market or serving a different segment? Personally, I say that’s somewhere in between. I do see a lot of brands who would not consider a Qonto Embed integration. Firstly, it is a potential risk for them to lose the customer to Qonto, and secondly, their vision of offering financial services might be bigger than just offloading this in parts to a neobank. On the other hand, I do see a lot of brands that have considered an embedded banking integration for the longest time but did not feel comfortable taking the risk of working with a traditional banking-as-a-service provider. Maybe they are better served with Qonto Embed.
I have a feeling we will hear more from Qonto about this offering soon, so I will make sure to cover it.
