GoCardless launches Verified Mandates in France

Wednesday 21 September 2022 13:20 CET | News

GoCardless has launched its first Open Banking-powered feature in France, to help merchants reduce fraud and provide a better customer experience.

Part of the GoCardless global ‘bank payment’ platform, Verified Mandates combines the Account Information Services (AIS) capabilities of Open Banking with bank debit to stop fraud before it happens.

Verified Mandates works in a three-step process which can be completed in less than a minute.

  1. A customer who enters a merchant’s checkout flow will be asked to complete a standard bank debit mandate creation form.

  2. They’ll be prompted to choose their bank, log into their online banking platform using their usual method and authorise the setup of their direct debit mandate.

  3. The merchant will receive instant confirmation of the successful verification and the customer can complete the checkout flow as usual.

Verified Mandates also offers bank-grade security, often with biometric authentication required, which is harder for fraudsters to overcome compared to, for example, using stolen card details.

The French launch follows the introduction of Verified Mandates in the US, UK, and Germany. Any merchant that collects payments from one of these four markets can now benefit from instant payer and bank account verification.

Payment fraud

GoCardless’ solution represents a new approach to tackling the issue of payment fraud, whether it stems from identity fraud or ‘customers’ that intentionally try to receive goods or services from merchants without paying for them.

The problem is particularly acute for recurring revenue businesses, with research indicating that 55% of French merchants on this model consider payment fraud a top threat facing their business. Despite this, over half of businesses (53%) say they still provide goods or services before confirming if a customer’s bank information is authentic and true.

Across the globe, fraudsters have rapidly adapted, migrated, and scaled their fraud tactics by taking advantage of organisations and individuals who aren’t prepared. If present trends continue, Juniper Research says online payment fraud losses are likely to climb as high as USD 48 billion by 2023.

Banks and PSPs need to move to a 24x7 fraud response. Instead of taking days to investigate a suspicious payment alert, they need to manage alerts in real time. It’s imperative to make quick but accurate decisions as customers make instant payments.

GoCardless’ Open Banking strategy

It also marks another milestone in GoCardless’ Open Banking strategy. The fintech launched its first Open Banking-powered feature, Instant Bank Pay, in 2021. In February 2022, it raised its Series G funding round to accelerate its growth in the space. Most recently, GoCardless announced the acquisition of Nordigen, the freemium Open Banking data provider, to combine Open Banking connectivity with bank payment expertise.

As part of the same strategy, GoCardless has also rolled out Variable Recurring Payments (VRPs), enabling financial providers to prepare for CMA as the ‘sweeping’ approaches. This means GoCardless’ ‘Instant Bank Pay’ feature supports one-off and recurring transactions through Open Banking.

VRPs are a type of Open Banking API, meaning that they work by using Open Banking rails to connect banks to Third Party Providers (TPP), like GoCardless, in a secure and standardised way. Functionally, they are similar to Direct Debit in that they enable recurring payments. However, unlike Direct Debit, with VRPs your customers authenticate their bank details right away, and straight from their online banking.

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Keywords: product launch, Open Banking, fraud prevention, merchant, customer experience
Categories: Banking & Fintech
Companies: GoCardless
Countries: France
This article is part of category

Banking & Fintech


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