As one of the most up-to-date technological advancements when it comes to accepting payments, Open Banking is designed with protection of customer data and ease of transaction processing as strong factors. Open Banking enables businesses to access a wider range of final service products, including improving their ability to manage their cashflow better, manage credit risk and obtain funding by using technology and solutions provided by a registered Account Information Service Provider (AISP) who are authorised to retrieve account data provided by banks and financial institutions and Payment Initiation Service Provider (PISP) who are authorised to initiate payments into or out of a user’s account.
Open Banking also presents an opportunity for business to process secure, digital payments from the clients and customers directly from their bank account, to which some of calling ‘the next generation of bank transfer’.
Traditionally, a bank transfer meant that the business had to send their invoice, complete with payment details and required the payee to populate the correct account details, including the sort code, account number, amount to pay and invoice reference. This required the payees time, patience, and of course their ability to provide fully accurate account details. This manual process was slow and fraught with human errors.
With the rise of Contactless payments and the growing popularity of the likes of digital wallets, Apple Pay and M-Commerce, the process above has never felt more clunky.
Here is when Open Banking can come into its own.
Also known as Account2Account payments or digital bank transfers, Open Banking enables businesses to make a payment request via the likes of email, electronic invoice, SMS or by payment link, directly to their customer, with their bank details, reference/invoice number and transaction value pre-populated, which means the payee can make payments in a few simple clicks, without the need for data entry. The customer simply needs to access their online banking or mobile banking app to approve the payment. The funds are then transferred immediately to the receiving bank using the Open Banking rails.
There are several benefits for businesses to consider and deploy Open Banking into their payment acceptance options.
Open Banking is ultimately a great alternative to accepting card payments for businesses of any size, and if you do accept card payments, it is a great additional service to be able to offer. Gala Technology works alongside industry leaders to enable them to incorporate Open Banking into their payment systems. Using our Open Banking solution, merchants have access to all the features expected of a modern payment method. Refunds, recurring payments, instalment plans, and full reconciliations, are already part of our solution.