Open Banking is increasingly being used by consumers and businesses alike and this is only going to increase. There are many benefits to using Open Banking when it comes to making and receiving payments and it is not just something that will benefit a certain type or size of business. No matter if you are a solopreneur or a multinational company, here’s how Open Banking can help businesses of all sizes.
Higher conversion rates
In all transactions, one of the greatest barriers to purchasing is when making a payment is difficult. If a consumer has to enter a lot of data or finds the payment process clunky, they could end up abandoning their basket, losing you a sale! Open Banking provides a seamless and quick payment process which can help reduce basket abandonment and in turn significantly improve conversion rates.
With other forms of payment, it can take a few days for it to be cleared and for the business to actually receive the payment. This time lag disappears with Open Banking as the process is instant. This will have such a positive impact on a business’s cash flow as they will have the money when they need it. Keeping track of payments is also now easier than ever and the time a business would have to spend chasing up late payments is now saved.
High acceptance rates
It can be frustrating for both the customer and the business when a payment fails. With Open Banking, everyone can have peace of mind as transactions succeed more than 95% of the time. This is in comparison to regular card payments that have a 5-14% failure rate.
If a customer disputes a payment, businesses are at risk of incurring a chargeback fee. Their business’ reputation is also at risk if this is a regular occurrence. Open Banking payments do not come with any risk of chargeback, reducing chargeback and reputation headaches.
Card payments can end up incurring a substantial cost to the business. Open Banking takes out the costs associated with the merchant and means that businesses can save up to 80% on fees compared to using cards.
Greater understanding of the customer
The data APIs can provide companies with information about the user’s finances and spending habits. This, in turn, can be used to create a tailored and personalised user experience online.
Compliance processes can be time-consuming. However, with Open Banking, customer information is readily available, saving essential time and money on additional administrative costs.
Open Banking is a safe and secure way to process both payments and data. Not only does using it help to protect the business, but it also helps customers remain safe as well. Especially when it comes to fraud. Third-party providers do not need to store personal information or passwords and Open Banking transactions require strong customer authentication (SCA) for all purchases, making them more secure than cards and other payment methods.
Compared to cards, digital wallets, or manual bank transfers, Open Banking has a lot of advantages as we have discussed in this article. The benefits Open Banking has to offer mean that businesses of all sizes, small or large can reap the rewards of the more streamlined payment process.
TrustistTransfer can help you collect bank transfer payments easier. We allow you to collect bank transfer payments from your mobile phone using a unique QR code or PayLink. There’s now no need to carry around a card machine, no expensive fees, and 0% risk of fraud or chargebacks. Learn more about what TrustistTransfer can do for your business.