The Bizum miracle: seven employees to move €50bn in payments

Barcelona"I'll just Bizum you the money". Anybody having lived in Catalonia for some time will have heard this, and it says a lot about a company that has managed to get its brand name into everyday speech. In October 2016, around thirty Spanish banks – then representing over 90% of the country's finances – reached an agreement among competitors to corner a common enemy. Big tech companies were threatening to break into their exclusive territory of cashless payments, which were timidly beginning to shift from cards to phones. The result of this alliance was Bizum, a platform that allowed free instant transfers between individuals with baking accounts at any of these banks at zero cost.

At the time, the aim of the initiative was to reach the 10 million users who already used their banks' apps on their phone at least once a month. Almost six years later, Bizum has more than doubled this milestone and is used by 20 million. "Back then the demand still had to be created, no one took out their phone when they wanted to split a bill for renting a paddle court with a group of friends; everyone reached for their wallet. Now it's not like that anymore," explains Ángel Nigorra, CEO of a company that is supported by a team of just seven employees. This Wedesday, Nigorra participated in the first session of Disruptive Cafés, a virtual conference organised by Acció to raise awareness of entrepreneurial initiatives.

Nigorra is aware that this reduced size is surprising for a workforce that has transferred €50bn in online payments since its inception. That's why he reveals the secret: "Seven people don't manage so many payments alone. It's not just us, there are different layers that make up our ecosystem, such as banks or providers that provide services for transfers," the head of Bizum said. According to its latest data, 77% of users make use the app at least once a month and 90% have used it in the last three months.

Bizum is an independent company, but it is owned by 23 Spanish banks, with the bigger banks taking a larger slice of the pie. According to the Mercantile Registry, CaixaBank has a 24% stake, while Banco Santander's is 21%. The last year with available data, 2020, revenue was €12.8m, through the commissions they charge banks. The app can be used abroad, as long as it is used to make transfers between Spanish bank accounts.

Businesses and donations

The market share they claim for themselves puts them in a situation of total monopoly: 99%. The Bizum phenomenon has benefited from the attraction of customers that financial institutions already had and has for the moment ousted fintech initiatives such as the Catalan Verse (now owned by Block), which was set up before this Bizum and aspired to do exactly the same thing. "Surely the trick is also user experience [an average transaction takes 22 seconds] and universality," Nigorra says. In fact, he insists that Bizum is not profit-oriented, but rather seeks sustainability. For now, and as long as its partners want it to be, the application has no plans to stop being free.

Nigorra – who is a telecommunications engineer and spent 15 years at the helm of Euro 6000 cash point network – admits that activity has picked up especially in the wake of the pandemic and that the app has shaken off its label as a tool for young people. "In the first market study we did the main user segment was 35 to 45-year-olds, which is logical because they were the ones who already used bank apps." Now the distribution between age groups has evened out and 18% of users are over 55.

Bizum has long since become more than just an app for square up between friends. The second use the company incorporated was donations for NGOs. In 2019 they also introduced online payments for shops, now used by 30,000 businesses. The latest feature they are working on would allow businesses to "Bizum" their customers in order to send promotions or refunds.