Tom: Looking at the infrastructural side of the market, Open Banking is a revolution for sure. Open Banking is based on the concept of an open eco-system, which means that banks and Third Party Providers (TPPs) need to find effective ways to interact.
Nathalie: From a merchant perspective, we consider the account-to-account payment as an additional payment mean alongside dozens of others, and it has to conquer its place. We are convinced it has a lot of potential because it is secure, flexible, and it answers market expectations (can be easily integrated). Being able to use your bank account to pay anywhere in Europe is a blessing for the consumer, while for the merchant, it is a cost-effective solution.
Tom: Due to the lack of standardisation, an unclear business model for banks, and the relatively new use of APIs when PSD2 was first introduced, it required significant adjustment from the banks, specifically. These challenges needed to be overcome. The APIs on the banks’ side are getting more stable now, and at Worldline, we have established connections with banks in Europe. Banks are preparing a scheme (SPAA) based on Open Banking in Europe. With this and the upcoming regulation (PSD3), we are getting closer to grasping the full potential.
Nathalie: There were several hurdles to overcome when introducing the account-to-account payments. One of them is the lack of a recognisable brand. So, it is challenging to convince the consumer if they don’t know it. A second major hurdle is providing a consistent user experience throughout Europe in the absence of a standardised scheme. All of this takes time to figure out and to get to the point that a good product can be introduced to the market.
Tom: Initially, the banks had to provide APIs to the market, and the majority of them did not have a developer portal or any other APIs at all. So, we helped over 30 banks in Europe to manage that. A second step is for the bank to use Open Banking for their own services, e.g. as a loan/mortgage provider, they can use the Account Information Service to assess the clients' creditworthiness and offer new services to their clients. For example, as an acquirer, they can provide account-to-account payments. We are supporting banks to find the use cases that are beneficial for them.
Nathalie: From the perspective of merchants, there have been high expectations surrounding Open Banking developments for quite some time. It's crucial that we now fulfil the full promise of account-to-account payments, which includes realising the potential for broader customer reach and facilitating cross-border payment opportunities. Equally important is the establishment of a consistent and user-friendly experience for both customers and merchants. Furthermore, the widespread adoption of instant payments, as mandated by the new Instant Payment regulation, is essential. Making instant payments 'the new normal' will significantly encourage merchant adoption of account-to-account payments, improving transaction efficiency and customer satisfaction.
Tom: Looking from our perspective. Open Banking has its place in the further digitalisation of the payments industry. It marks the beginning of digitally opening up data, which now starts with banks but is already moving towards other financial industries such as insurance. We are convinced that new business models will arise and payments, identity, and data will be key elements in these new eco-systems.
Nathalie: As a paytech company, we firmly believe that Open Banking is not a passing trend but a response to genuine market demand. We've observed strong demand across various use cases, vertical markets, and regions where no comparable alternatives offer the same promises. At Worldline, we are actively introducing account-to-account payments and have initiated its rollout through our multiple channels. Currently, our primary focus is on online payments, and we're also exploring the potential for in-store use cases.
Our commitment is to ensure that all our customers across Europe can leverage account-to-account payments seamlessly. However, we acknowledge that achieving consistency both from the customer perspective and across different markets is essential for global adoption. This requires a concerted effort with the market players to ultimately make Open Banking an integral part of the future of payments.
Tom: I would just like to emphasise the importance of collaboration and innovation in the financial industry. Open Banking is opening up exciting opportunities, and I encourage everyone to explore its potential.
Nathalie: Absolutely, and from the merchant perspective, I would like to stress the significance of adapting to the changing landscape. The future of payment is dynamic, and embracing these changes can lead to new opportunities for growth.
This editorial piece was first published in the Open Finance Report 2023. We encourage you to download the report and find out the latest trends and developments in the world of Open Banking and Open Finance, as the road to Open Data continues.
Nathalie Crouzet is Head of Cross-Vertical Initiatives for Omni-channel Enterprises at Worldline Merchant Services. With over 15 years of experience in payments, Nathalie is an expert in introducing new online payment methods to merchants in Europe.
Tom Wijnen is Product Marketing Manager at Worldline Financial Services. With over 20 years of experience in payments, Tom is an expert in the development of new payment methods in the banking industry.
About Worldline
Worldline helps businesses of all shapes and sizes to accelerate their growth journey – quickly, simply, and securely. With advanced payments technology, local expertise, and solutions customised for hundreds of markets and industries, Worldline powers the growth of over one million businesses around the world. Worldline generated EUR 4.4 billion in revenue in 2022.
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