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PayPers Open Banking Report 2022.


Pay by Bank Team


Some companies think of Open Banking for payments as purely a technical solution derived from regulation. While the technical offering might have been where it began, Open Banking also offers innovative ways for payments solutions to drive conversion, increase loyalty, and provide outstanding customer experiences. Companies that quickly recognise and act upon these opportunities for customer connection are the ones set to benefit the most in this new era.

So, where do the opportunities begin? First of all, checkout security and speed are still top of mind for consumers when choosing payment methods. This has been the case for years and should always be right at the top of the agenda when building new payment methods. A safe and quick checkout process is no longer a value-add. These days, it is indisputably a must-have.

When checkout experiences are clunky, difficult for the user to use, or do not appear entirely trustworthy, the consumer is unlikely to try it – let alone keep coming back to it. Think back to when contactless payments were first introduced or when Apple Pay first came to be – paying through our mobile phones or watches once felt like an entirely novel and futuristic option that few understood or wanted to even attempt.

Over recent years, the popularity of these payment methods has progressed in leaps and bounds. Four years ago, only 7% of all payments in the UK were made through contactless methods. Now, 83% of people in the UK use contactless and not a single age group or region reports below 75% usage. Part of this shift can be attributed to the pandemic and the social distancing measures that accelerated the digitisation of payments around the world.

However, we also know that the pandemic simply accelerated trends that were already starting to take hold. As mentioned, the key determinants affecting consumer decisions around payment methods are how simple it is to use and how safe they feel their financial details are. With this in mind, there are two critical elements for merchants to consider when it comes to introducing new payment methods.

The first is education. If customers do not understand the new payment method and how it works, they will not use it. They need to know what to expect. Most importantly, this education needs to come across as efficiently as possible. Customers are not interested in long-winded tutorials. They need to ‘get the gist’ in a few seconds. A great example is studying how contactless payments became mainstream in the UK.

While early contactless payments in the UK took place in 2007, few noticed. Then, consumers became increasingly educated through ‘contactless payment limit’ signs on systems they already frequented, such as TfL. In 2012, when TfL enabled London buses to accept contactless payments and contactless payment limits increased from GBP 15 to GBP 20, more traction began to take place. In 2014, the Oyster contactless readers appeared throughout the TfL network and were vital to the popularisation of the payment method.

The second element to consider when introducing new payment methods to consumers is incentivisation. Providing incentives to make something more attractive is nothing new: introductory offers have often been used to incentivise trials in many industries. If merchants want customers to use a new payment method, promotional activity has always been there to help drive engagement.

After all, how have consumers historically decided which credit cards to use upon checkout? It is typically down to considering what they are receiving in exchange – such as bonus points, high earn rates, uncapped points etc. Some consumers might value cashback or points they can convert into vouchers for shops, airlines, hotels, and more.

Bearing those two critical elements in mind, at Banked : we focus on both to ensure merchants’ successful implementation and introduction of Pay by Bank to consumers. Consumers receive a simple and secure checkout experience that connects them directly to their bank account to make a payment. No card number data entry, no financial details are shared, and there is no account to create and maintain.

We focus on the end consumer and their experience with our merchant partners. We provide everything merchants need to talk to consumers and make it possible to educate the consumer in a simple, easy way. We support not only with the tech but also with the marketing tools and resources, helping merchants to overcome any barriers as they onboard the consumer. This means merchants do not need to solve issues alone, as we help the consumer use (and embrace) the technology.

We know what really matters is delivering the best end-to-end customer experience and adding value to the payment process. We do this with a tailored checkout flow, a localised user experience by market and segment, and a flexible incentives platform embedded into the infrastructure. We bring brands to the merchant and handle the contracting, integration, and servicing of a wide range of incentives to minimise the effort needed to drive engagement and loyalty with consumers.

Measures like this help us bring Open Banking away from being a reaction to regulatory measures and instead the start of an exciting new chapter where the barriers between consumers and merchants dissolve. Consumers can pay seamlessly and securely, favouring the merchants that enable them to do precisely this. We take pride in enabling these connections.

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