French banks BNP Paribas and BPCE in payments sector tie-up

PARIS (Reuters) - BNP Paribas, the euro zone's biggest lender, and French rival BPCE plan to form a joint venture in the payments sector, the two companies said on Thursday.

They will compete against Nexi and Worldline, with the aim of operating the third-biggest payments processor in Europe, the pair said.

The two banks will invest 100 million euros ($107 million) each between 2024 and 2028 in the project, which will take the form of a separate legal entity with its own governance and home-grown technology, said Yves Tyrode, who leads BPCE's digital & payments unit.

While BNP and BPCE plan to use the same processing technology, the banks will sell the service separately to their clients.

The goal is to propose the processor internationally, Tyrode and Thierry Laborde, BNP's deputy CEO, said in a joint call with reporters.

BPCE and BNP, which have partnered in the development of payment processing software, are the market leaders in France, handling around a combined 30% of card payments made in the country.

Rival Credit Agricole has also announced it is forming a joint venture with Worldline to provide payment services to businesses and customers in France.

($1 = 0.9318 euros)

(Reporting by Sudip Kar-Gupta and Mathieu Rosemain; Editing by David Goodman, Kirsten Donovan)