How SSP became a Pay-by-Bank leader with Skaleet Core Banking Solutions

About SSP (Score & Secure Payment)

SSP is one of the leading French specialists in pay-by-bank. The Company offers its merchant customers payment solutions covering the entire value chain (issuance, acceptance, security, acquisition, collection) to meet the evolving payment needs of end customers – individuals or businesses – in-store and online. As a pioneer of pay-by-bank, SSP is the only player capable of offering all means of action on a bank account: payment, reimbursement and exchange.

Regulated by the ACPR with payment institution approval (acquisition of payment orders, opening of payment accounts), AISP (validation of the IBAN-bearer pair) and PISP (initiation of payment by transfer), SSP offers merchants an end-to-end solution for accepting and processing payments of all kinds: bank account (transfer and direct debit via open banking), bank card, installment payment by card with cash advance, check, and also medium-term credit solutions.

SSP is one of the few players to offer direct bank account payment methods as a complementary and alternative solution to card payments. Although account-to-account payments remain small compared to card payments in value (about 13% in Europe), their relevance and complementarity are now proven:

• Increased acceptance rates in high basket contexts (card limit and trust issues during web payment)
• Economic interest for merchants: costs of a SEPA SCT transfer or a Direct Debit (SDD) are 3x lower than card payment costs
• Simple implementation of flexible payment journeys (e.g., deferred payment or payment in installments by direct debit)

The challenge SSP faced

When launching in 2019, SSP studied the internal setup of the mechanics associated with third-party payment collection. In practice, this involves debiting the end customer's bank account on behalf of the merchant and then transferring the funds from the SSP transit account to the merchant’s bank account. “This operation seemed very simple on paper but quickly became operationally complex,” says Vincent Vallaeys, General Manager of SSP. Maintaining synchronized integrity of various ledgers in a context of multiple financial flows and accounting requirements is indeed a real technical challenge. “For example, without automatic synchronization with the bank, the rejection file was not observable, and therefore the payment could be considered paid when it wasn’t, necessitating hours of control and manual processing, not to mention the complexity of managing Pax files, even though we knew the Pain files very well,” recalls Vincent.

At that time, SSP sought a solution to manage accounts, financial flows between accounts, and associated accounting: a core banking system. SSP’s desire to transform loyalty cards into pay-by-bank IBAN cards required becoming a sub-participant of the SEPA network (behind a lead bank), making the need for a robust technological platform even more pressing. “It was important for us to focus on our added value and core business of creating and distributing payment solutions; relying on an external SaaS for accounting ledger and flows was natural as these are non-differentiating but essential capabilities that need to be secured at the best cost,” explains Vincent.

Context

Based on its experience with European PSPs, Skaleet observed four key trends in the payments market:  

• Evolution of demand in favor of instant and digital payments (€160 billion spent online in France in 2023, +10.5% YoY, almost €1 trillion in Europe)  
• Evolution of the offer facilitated by the modernization of banking infrastructures (e.g., SEPA Inst), more compatible with merchant payment uses  
• Regulatory evolution supported by the European approach to harmonization and market liberalization, and reduction of transaction costs (notably PSD2 allowing non-banking players to operate financial activities within a light but defined framework for consumer protection)  
• Rapid growth of account-to-account payments, noted as early as 2019 by McKinsey (the year SSP obtained its license): “account-to-account payment methods are quickly rising in popularity and ease of use, particularly in Europe and Asia, and are emerging as a credible alternative to debit/credit cards for retail non-cash payments. This model has existed for some time (e.g., PayPal’s direct debit and credit transfer services), but recent changes are making the process faster and simpler to use: the introduction of instant payments, implementation of Open Banking standards encouraging the emergence of account-to-account payment solutions, and allowing third parties to initiate payments on behalf of their clients, providing a seamless experience.”

Why SSP chose to partner with Skaleet

SSP met with several “historical market leaders whose offers were over-calibrated and deadlines too long.” In contrast, Skaleet offered a next-generation SaaS Core Banking Platform.  Skaleet could be deployed in less than half the time, with a product suitable for both immediate and future needs, due to its scalability as well as a variable pricing model, which paired well with SSP’s launch and growth trajectory.

According to Vincent, “it would have been very difficult to imagine the entire solution internally, design it, deliver it on time, industrialize it, and maintain it to gradually resolve the naturally accumulated technical debt, deploy new products, and adapt to changing regulations… Building everything internally is always tempting as an engineer but unfortunately neither technologically feasible at the right level of speed and quality nor economically viable.”  

Working with Skaleet allowed SSP to derisk the project, providing a high-quality, modern product at an economical cost, and delivering it significantly faster than with other options.

A successful partnership

Skaleet and SSP jointly deployed an end-to-end production solution allowing merchants to open a payment account from which they bill their customers for goods or services purchases (third-party collection). Skaleet enables the management of these merchant accounts, access to the SEPA network via Skaleet - BPCE Payment Services connectivity, AML transaction filtering through the Skaleet - Comply Advantage connector, auxiliary accounting management feeding the general ledger in CEGID, and providing necessary data for regulatory reporting through integration with Invoke. “The richness of retry mechanisms, control, and monitoring systems secure our operations daily,” explains Vincent.

The Skaleet + SSP collaboration is a success in several respects:

• Cost-effective implementation: According to Vincent, “it would have required mobilizing dozens of engineers for months to reproduce what Skaleet provided in SaaS mode.” 
• Deployment of a highly scalable solution: “This doesn’t mean there are never problems but monitoring and facilitating audit trails allow for quickly identifying and remedying issues,” says Vincent, adding that direct debit volumes can increase 8x from one quarter to the next in a context of seasonal flows and/or onboarding new merchants, and this growth is easily absorbed by the Skaleet platform
• Building a competitive SSP offer in the market due to low IT and operational costs and direct access to the lead bank, enabling the processing of flows at direct costs charged by BPCE PS without an intermediary’s margin. “Today, we can process 1.5 million transactions per year with a 3-person operating team and direct access to the lead bank BPCE PS without an intermediary, allowing us to operate our service with very low transaction production costs, giving us room for price competitiveness,” says Vincent
• Positioning SSP at the forefront of payment innovation and this over time in a constantly changing market. “Skaleet continuously evolves with a roadmap well aligned with our challenges; for example, we were the first external clients of the BPCE Group to integrate the SCT Inst APIs of the BPCE Payment Services payment factory,” Vincent, GM.

“We are very proud to have supported SSP for nearly 4 years, sharing pioneering innovation values with them,” says Hervé Manceron, CEO Skaleet.

“The success of the SSP – Skaleet collaboration is a very illustrative example of our proven value proposition to PSPs – greenfield or in transformation – serving reduced time to market, competitive average transaction costs, and the highest security and industrialization standards,” says Martin Della Chiesa, Co-CEO Skaleet.

Today, thanks to the collaboration between Skaleet and SSP, in just over 2 years, SSP has a portfolio of more than 2,000 customers, with just over a million direct debits issued each year.