The Paypers sat down with Brite Payments' founder and CEO, Lena Hackelöer, to discover how merchants benefit from Open Banking, the impact that customer experience has had on payment innovation, and what we can expect from the future.
Open Banking has given merchants more choice and the ability to differentiate themselves from those using traditional payment methods. It facilitates the use of new and innovative payment methods that are faster, more secure, and provide a better customer experience. As a result, merchants who adopt these new payment methods can get ahead of the competition and create a more desirable consumer proposition.
Open Banking has driven innovation in the payments landscape and opened up superior payment methods that meet the needs of today’s consumers.
For instance, account-to-account (A2A) payments can offer significant benefits for merchants. Firstly, in comparison to card payments and the complicated pricing models associated with this method, the cost of A2A payments is lower and more predictable.
Furthermore, it is easy for merchants to integrate and facilitates an improved cash flow, which is a significant factor for consideration, particularly during periods of economic uncertainty.
On top of that, A2A payments make the merchant proposition more engaging for consumers due to their security, speed, and convenience. These factors are high on the list for consumer preference; therefore, they create better customer satisfaction and can help to increase brand loyalty.
The consumer desire for convenience has had a significant impact on payment innovation, demanding quick, secure, simple payment methods from merchants. There are a number of Open Banking-powered payment methods that illustrate this impact well.
Consumers have made it clear that they require methods that make the payment process quick and easy. The Open Banking-based A2A payment method has been crafted with consumer convenience in mind, where all you need is a bank account, and users do not need to complete cumbersome sign-up forms or create additional passwords. All they need is the top-of-mind information they would use to log in to their banking app, making the process very straightforward.
Another consumer preference that we have seen significantly influence payment innovation over the past few years is the desire to automate processes in order to make them more convenient. Consequently, we have seen the rise of Open Banking-powered recurring payments products reaching the market to offer an automated/recurrent approach to subscription payments for example. The solutions allow monthly payments of a fixed amount to be sent directly from a customer’s account, without the need for updating or changing card details. This development is particularly valuable for consumers with long-term subscriptions who would currently face card expiry and cumbersome detail re-entry every few years.
One of the most promising applications for Open Banking-based payments in the near future is instant payments. With this technology, businesses and consumers can transfer money to each other in real-time, without having to wait for the funds to clear through a bank. This could be particularly beneficial for small businesses, which frequently face days or even weeks for payments from their customers to clear. Therefore, instant payments stand to have a considerable impact on their cash flow management, which is timely given the current economic climate.
In the retail setting, retailers are currently under pressure like never before to provide their customers with convenient and personalised payment experiences. Open Banking payments can enable a particularly seamless user experience on mobile, for example, for in-app payments across multiple verticals. Therefore, this is likely to be another area where Open Banking-based payments stand to make the most difference in the shorter term, in sectors where we already see increased interest, such as retail, ecommerce, banking/finance, lending, marketplaces, media, entertainment, and telecoms.
Within the next 12 months, we expect to see improved regulation and alignment across different regulators in Europe. The Open Banking space is still in its infancy and better regulation will provide better experiences and improved products for everyone in the field.
There will also be a number of new products which are coming to market that are improving the merchant experience and offer increased convenience of use for the consumer. As banks are increasingly looking for ways to monetise their Open Banking APIeus, we expect to see more premium API s with a wider range of features. These can be used by third-party providers, such as ourselves, to build new products and services. Ultimately, the goal is to make Open Banking payments even more accessible and convenient for both merchants and consumers alike.
This interview has first been published in the Open Banking Report 2022. Click here to download the report.
Lena Hackelöer is the founder and CEO of Brite Payments, and a recognised leader in the fintech industry, with diverse experience built in businesses including Klarna and Qliro. Lena’s experience makes her uniquely placed to speak knowledgeably about Open Banking and its impact on the wider European payments landscape.
Brite Payments is an instant payments provider leveraging Open Banking technology to process A2A payments in real-time between consumers and online merchants. With Brite, consumers authenticate themselves using their bank’s usual identification method. Brite operates across 21 markets in Europe and is connected to more than 3,800 banks within the EU.
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