The Bancontact Payment Method Explained

Bancontact is a market leader in Belgium for payment services, with a reported 17 million-plus cards in circulation and a colossal 94% of the Belgian population using Bancontact.

While Bancontact stands out as a dominant local payment method, the e-payment landscape is continually evolving, and alternative solutions like Noda's open banking platform offer compelling advantages.

In this article we’re digging into the Bancontact payment method, how it works, its pros and cons and why open banking might better benefit your business.

What is Bancontact?

Bancontact was founded back in 1989 to offer reliable electronic money transfers and is now synonymous with card services in Belgium. It has partnerships with almost all Belgium banks; essentially, it’s Belgium’s answer to Visa or Mastercard.

The Bancontact payment method allows users to make payments using their debit cards, both in-store and online. Bancontact merged with payment service Payconiq in 2018 to form the Bancontact Payconiq Company, consolidating their payment applications into one product–Payconiq by Bancontact.

The Payconiq by Bancontact app allows users to complete payments with smartphones or devices, modernising Bancontact’s payment services.

How does Bancontact work?

Bancontact facilitates payments through secure online banking for online transactions and contactless technology for in-store payments. Customers can pay online or in-store by:

• Bancontact card
• Payconiq by Bancontact app
• Scanning a QR code
• Apple Pay (Belfius and Banx customers can pay with Bancontact on Apple Pay via their iPhone and Apple Watch)

PIN, fingerprint, or facial recognition is used to authorise payments online, while in-store payments are made via contactless cards or the Bancontact app, or more recently, Apple Pay.

Businesses integrate Bancontact's payment gateway for online transactions and use contactless POS terminals (using near-filed communication tech) for in-store payments, ensuring secure and real-time transaction processing.

Where is Bancontact available?

Bancontact is predominantly used in Belgium, and this remains its core market. However, it also has a presence in the Netherlands, particularly for online business. There is also a small but growing presence in Luxemburg, simply due to geographical proximity and the high number of cross-border workers.

Likewise, border regions in France are increasingly integrating Bancontact into their payment systems in order to better serve Belgium consumers.

It is limited by its supporting bank networks though, which are only Belgian banks.

How to use Bancontact

To make a payment using Bancontact is straightforward for customers:

Online: At checkout, customers select the Bancontact online payment option. If they're using a computer, they scan the QR code displayed on the screen with their Payconiq by Bancontact app or their bank’s app on their smartphone.

If they're on a smartphone, they'll be redirected to the Payconiq by Bancontact app. They check the amount and confirm the payment using their PIN, fingerprint, or facial recognition, receiving immediate payment confirmation.

In-Store: Customers tap Bancontact cards or their smartphone/wearable to pay via the Bancontact app or digital wallet at the payment terminal. The terminal sends the payment request to the bank and displays a successful transaction message once the bank confirms the payment.

Mobile: Open the Payconiq by Bancontact app, scan the merchant's QR code, and confirm the payment. The app also supports contactless in-store payments, online purchases, money transfers, and setting up recurring bill payments.

Bancontact for businesses: The pros and cons

Pros:

• High Adoption: With over 94% of Belgians holding a Bancontact card, it's a familiar and trusted payment method for businesses in Belgium.
• Omnichannel Support: Bancontact facilitates payments across various channels, including in-store, online, and via mobile.

Cons:

• Limited International Reach: Primarily used in Belgium, with Bancontact international payments being very limited, making it an impractical payment solution for businesses targeting customers beyond Belgium.
• Dependence on Bank Infrastructure: Relies heavily on the Belgian banking system and traditional card networks, meaning slow settlements, high fees and challenges for cross-border transactions.

Business can bypass reliance on card networks altogether and benefit from instant bank-to-bank payments, lower fees, zero chargebacks, global coverage and enhanced security by opting for Noda open banking payments.

Why Noda’s open banking is a better alternative

While Bancontact in Belgium offers a robust local payment solution, Noda's advanced Open Banking API presents several advantages for businesses looking to scale and expand their reach globally, while offering customers the ultimate fintech efficiency.

Why pay-by-bank method is better than card payments:

• Lower Fees: By eliminating intermediaries like card networks and acquiring banks, Noda can offer significantly cheaper transaction costs.
• No Chargebacks: Direct bank-to-bank payments eliminate the risk of chargebacks.
• Faster Settlements: Bank-to-bank payments can be processed instantly when the banks involved supports instant payment systems like Faster Payments in the UK and SEPA Instant across the EU.
• Enhanced Security: Bank-level authentication, offering a secure and trustworthy payment environment.
• Comprehensive Data Services: Provides insights into customer behaviour and lifetime value, helping you make better business decisions.

Bancontact vs. Noda

To better understand the benefits of open banking payments with Noda, we’ve laid out a no-nonsense side-by-side comparison with Bancontact:

As well as being faster, cheaper and ultra-convenient for you and your customers, Noda can boost your business operations from the day you onboard.

Noda’s Key Features

• Global Bank Coverage: Access to over 2,000 banks across 28 countries, including Belgium.
• C2B2C Payment Cycle: Handles both payments and payouts, beneficial for industries like online gaming.
• High Acceptance Rate: Achieves an impressive 94% payment acceptance rate.
• User-Friendly Interface: Present users with multiple payment options tailored to each country’s major banks – we call it the Noda Buffet!
• AI-Powered Payment Pages and Links: Allows businesses to generate branded payment pages without a website, plus instant payment links and QR codes.
• Identity Verification: Offers non-document-based KYC checks through their bank accounts, enabling businesses to verify user ID within seconds.
• E-commerce Integration: Compatible with platforms like WooCommerce, Magento, OpenCart and PrestaShop.
• Personal Account Management: From day one, we’ll get to know you and your business, providing personal customer support whenever you need it.

Futureproof your payments with Noda

Whether you’re exploring how to expand your business beyond Belgium or just seeking a more cost-effective, efficient payment solution, Noda's open banking platform offers a compelling alternative to Bancontact.

Chat to the Noda team today and find out how you can benefit from our revolutionary and comprehensive payment ecosystem that delivers speed, cost effectiveness and enhanced security.