Consumer credit, Cofidis Italia aims for 2 million new disbursements by the end of the year and is not afraid of the Lexitor ruling

While eCommerce is growing and the incidence of online transactions increases, which in the first six months of this year came to make up 24% of total transactions (according to the latest Credit Cards and Digital Payments Observatory edited by Assofin, Ipsos and Nomisma with the contribution of CRIF), Cofidis Italia, active in the consumer credit and deferred payment sector, conquers new market shares and grows more than the reference sector. interviewed the general manager, Alessandro Borzacca.

Request: What are the growth rates of Cofidis Italia?

Reply: Cofidis Italia is a small company in the Bel Paese, a market presided over by larger players who, however, also operate in the automotive sector where Cofidis is not present. Our company therefore has, as an absolute figure, a market share of less than 5%, but in areas where we have been operating for the longest time, we reach 15% of the market share and boast growth rates higher than those of the market. In 2021, for example, compared to 2020 we grew by +14% in terms of total new disbursements against a market that recorded a -26%. And in the first nine months of this year we have a 38% growth compared to a market that has grown by 13%. By the end of this year we expect to maintain this growth trend thanks to almost 2 million transactions overall.

d: What are the factors behind this performance?

R: Cofidis Italia has developed a strategy that is highly oriented towards the B2B business, in particular with the commercial distribution market but also with credit institutions. From the point of view of the product offer, we have been pioneers of the convergence between credit and payments. The success of Cofidis Italia is mainly linked to these two factors and therefore on the one hand we have a business model based on strong relationships with commercial partners, Amazon in the first place but there are over 20,000 in total, and on the other institutional ones with an offer of products ranging from classic consumer credit to deferred payments and payment facilities, all characterized by the best possible customer experience

d: In the last period, has demand been dominated by any product in particular?

R: We don’t see much differentiation in demand across any line of business. We grow more than the market thanks to our ability to innovate both in terms of processes and products. A strategy that will continue in the coming years. The main investment on which we focus is on bringing the products we have up to speed, in particular the last two that have been launched: PagoDIL for e.commerce and PagoCREDIT, the private revolving credit line which aims to increasingly loyal customers of affiliated retailers, creating a preferential channel for purchases at their points of sale. The service involves a significant increase in consumer loyalty with the merchant in which the credit line has been activated and is also the expression of a quick and easy customer experience.

d: Are there any open dossiers for possible acquisitions in Italy?

R: In 2015 Cofidis acquired Centax, a historical Italian company active in the guarantee of checks which has allowed us, thanks to its POS skills, to develop PagoDIL, and in 2019 another small company specialized in salary assignment, a market in which we had chosen to enter. The company remains constantly attentive to the evolution of the consumer credit market in Italy for further opportunities.

d: Are rising interest rates in recent months discouraging demand for credit?

R: In the last two months the market has grown a little less. There is less recourse to credit both due to the uncertainty dictated by the war still in progress and due to high inflation and due to the lower predisposition to purchases on the part of consumers who tend to postpone. High rates should discourage customers, but we don’t see this effect. Rather, new increases in the conditions applied and more restrictive policies by financial companies in the concession stages are foreseeable. This will be the real leitmotif of 2023.

d: Are you concerned about the decision that the Constitutional Court will take on the Lexitor case, the Polish company that offers services to consumers by noting the credit rights they have with banking institutions and that has appealed to the European Court of Justice in the matter of early repayment of credit? If the judges of the Consulta opted for retroactivity, the estimated damage for consumer credit would be 2.6 billion and another 2.2 billion for salary-backed loans.

R: There is still a lot of uncertainty about this case. However, the Lexitor case can potentially have a significant impact on operators, in particular for the salary-backed product. As far as Cofidis is concerned, also in consideration of our recent entry into the transfer market and the pricing policies adopted, any impact is estimated to be marginal. (All rights reserved)

Consumer credit, Cofidis Italia aims for 2 million new disbursements by the end of the year and is not afraid of the Lexitor ruling –