• Holly Coventry, Vice President of International Open Banking Payments at American Express


• 18.07.2022 11:45 am
#openbanking #payments

The pandemic has been a catalyst for consumers to spend more online and has unlocked an appetite in many to new payment methods. Our research found that 20% of consumers reported that the pandemic has changed the way they think about how they pay for products and services.

Open Banking has taken centre stage in this movement, accelerating innovation within the payments sector and providing forward-thinking businesses of all sizes with a competitive edge.

And the UK is leading the way. Last month, the number of Open Banking users reached a total of 6 million, with Open Banking payments growing at a rate of 500% year on year.

The number of products and services powered by Open Banking is continuing to grow and evolve, but despite the huge amount of progress in recent years, there remain many aspects of financial systems that are based on decades-old legacy models.

Benefitting from the rise of online solutions, Digital Invoicing helps companies increase efficiency and productivity. And with policymakers in the European Union set to roll out Open Banking solutions to streamline tax collection and instigate data-driven fraud prevention, Digital Invoicing is an area of promising growth.

The possibilities are endless, but the time to act is now. As consumers and businesses adapt to a new era of financial literacy, disruption is no longer a novelty – it’s expected.

This means that merchants who do not yet offer a variety of payment options both online and in-store could miss out on valuable sales. Now more than ever, businesses need to capture spending at every opportunity and ensure their payment processes don’t put additional barriers in the way of their customers. 

But, despite the growth of this sector, there are still many who are yet to fully leverage the benefits this technology can offer. 

Friction-free, automated payments drive conversion

Slow and problematic payment processes are no longer tolerated by shoppers – with 78% of consumers not completing online payments if they are required to enter additional information at checkout^[1], merchants need a solution. This is where Open Banking products can provide a solution – with no login or debit card details required to complete transactions, users can complete a purchase by simply clicking on the button, selecting their bank and authorising the payment using biometric authentication.

What’s more, Open Banking removes the need for third-party payment processors – creating a totally seamless experience. So, with payments friction being forced out, automated payments will play a huge role in building loyalty and helping to drive the conversion of first-time customers into repeat users – meaning it’s a win-win for businesses.

Reliable, secure solutions foster customer loyalty

Consumers are increasingly conscious of protecting their finances, and this is only accelerating the demand for Open Banking. According to our research, nearly half (48%) highlight the importance of checking whether a service is verified by payment or bank regulator whilst a further (51%) of consumers express some concerns and reluctance to use a payment method from an unknown brand or provider. 

Payments solutions powered by Open Banking can help relieve these concerns, by giving consumers full control over how their financial data is used and who can access it. As well as this, consumers are also reassured that their payment solutions are powered by an established and reputable institution, giving consumers the reassurance and confidence they need to use it again and again.

This is enhanced by the fact that every Open Banking payment is bank authenticated, so third-party providers don’t store sensitive personal information or passwords. From a business perspective, compliance to Strong Customer Authentication (SCA) requirements is built into the product, meaning it’s one less thing for businesses to worry about. 

Open Banking is already bringing significant opportunities to consumers and businesses – and it’s only set to grow further. The tools are here to meet customers’ changing expectations effectively and efficiently. It’s now up to businesses to make the most of them.