Open Banking Payments provide a disruptive alternative to online payments, but what does an actual payments journey look like for a customer? If you have been following the fire.com blog over the last number of weeks, you may have noticed that we have quite a number of Open Banking Payments initiatives, from the Irish Guide Dogs Day through to our own Open Banking Terminal. These are exciting developments, both for us as a company, but also within the larger Open Banking sphere. However, quite understandably, the concept of Open Banking and Fire Open Payments is still an unknown to the vast majority. That is the inspiration for this blog post – to shed some light around the Fire Open Payments journey and, hopefully, prompt more of you readers to consider trialling the process yourselves!
The Open Banking journey with Fire Open Payments
For this particular journey, I am on an e-commerce website and want to purchase a baguette from my local bakery – Tasty Bakery.
Similar to any e-commerce flow I select my products, and go to the “Checkout”. After entering my Delivery Details I then proceed to payment. At this point most of us would be used to fumbling around for our purse/wallet, then squinting to transcribe the card number into the website.
However, with just a tap of a button, I am redirected to the Fire Open Payments journey.
I select my bank of choice from the list.
I bank with Natwest, so I’ll select them from the list. I then consent to the payment, which will redirect me to my Natwest banking app.
I will be prompted to log in to my Natwest app to authorise the payment. This part of the journey will be dictated by the bank itself in terms of how it designs their app flow.
This is an important part of the journey; it ensures that the customer who initiated the payment is the account owner and not attempting to make a payment fraudulently.
After scanning my fingerprint, I select the account I wish to pay from.
A quick tap of the ‘Account Selected’ button and I can authorise the payment.
Thankfully my account balance just stretches to cover the payment and I will be able to complete the purchase!
I will then be returned to my browser where I see that the payment has indeed been successful. I can request an optional receipt before returning to the merchant website, where I will hopefully be informed that my baguette will be delivered fresh from the oven.
There you have it, I’ve managed to make a payment through Fire Open Payments. The main benefits to my mind is the flow itself and the enhanced security. I never had to divert my attention from my phone to complete the payment; everything is contained within my browser and banking app. Having the flexibility to choose the account to pay from, coupled with a live view of my account balance was a bonus too.
This process provided that added assurance by authenticating the payment using my fingerprint – I was confident that no one could fraudulently create a payment on my behalf without access to my thumb! Also, if you’re security-conscious like me, I never save my card details within the browser, so I regularly find myself leaving the comfort of my couch to retrieve my debit card to enter my card number. This step was completely bypassed through Open Banking.
If you are curious about trying the process yourself, scan the QR code below or head over to http://www.fire.com/donate to make a small donation to Calcutta Connect and trial the Open Banking experience.
Eoin Kent is a Product Analyst at Fire with experience working on Open Banking solutions – from APIs to UI/UX and everything in between.
The way in which merchants accept payments and the devices used to facilitate these transactions have undergone quite the evolution over the past 70 years. Merchant acquiring technology now comes in many form factors tailored to the business needs of each merchant case. Although, over this time cards have remained the primary payment method which consumers rely on. The introduction of open banking payments unlocks the potential for a new paradigm shift away from cards and towards account based payments. Merchants are beginning to realise the benefits that come with this new payment mechanism and consumers are becoming familiar with a new payment flow.
In this blog post we’ll:
Cover a brief background on the evolution of merchant devices and consumer payment methods.
An overview of open banking payments and the benefits they can provide to merchants.
Introduce the Open Banking Terminal by Fire – transforming your mobile device into a point of sale terminal ready to accept open banking payments straight into your Fire Business Account.
A Brief History of In-Person Payments
When looking back at the evolution of in-person payments we’re going to be focus specifically on the consumer payment method – how are funds exchanged between the merchant and consumer and how quickly does the merchant receive the funds?
Evolution of consumer payment methods over time
The primary consumer payment method by and large remained unchanged until the first big shift from cash to card payments with the introduction of the Diner’s Club charge card in 1950. Since then, we’ve seen card technology go through many iterations from the conception of the card networks in the 1950’s, the introduction of the magnetic strip in the 1980’s, EMV technology in the 1990’s and mobile wallets in 2008. All leading to more secure and accessible card payments. Although incremental improvements were made over that time the primary consumer payment method largely remained the same, a card payment. The same financial players are involved: issuers, merchant acquirers, card networks and numerous intermediary service providers. Open banking payments help facilitate the next big shift in consumer payment methods from card to account-based payments.
Open Banking Payments and its Benefits to Merchants
As covered in our previous blog post, “Open Banking Payments – What needs to happen next?”, open banking payments in the EU and UK can be traced back to the introduction of the second Payment Services Directive (PSD2) and it’s associated regulatory technical standards (RTS).
With these account based payments there are a number of benefits for merchants and consumers alike:
Cost-Effective – No hardware required. Accepting payments through the Open Banking Terminal is cheaper than other ways to get paid. No monthly or recurring fees, just one low transaction fee and reduced chargebacks.
Quicker Settlement – By executing payments via Faster Payments (Sterling) or SEPA (Euro), funds settle into your Fire Business Account quickly – within 6 business hours. Reconciliation is automated.
Less Fraud – The Open Banking Terminal is one of the safest ways to collect payments. No personal credentials are needed, reducing the risk of fraud.
The Open Banking Terminal by Fire
With the introduction of the Open Banking Terminal by Fire, merchants can realise the benefits of the shift towards account based payments from within the Fire Business Mobile App. Allowing any merchant to quickly accept ad-hoc payments from their customers on the go and have collect the funds straight into their Fire Business Account within 6 business hours.
Enter the amount to be paid in the Fire Business Mobile App.
A QR code is generated in the app to be presented to the customer to scan.
The customer scans the QR code and picks their bank.
The customer consents to the payment.
The customer are redirected to their Bank’s mobile app.
The customer reviews and authorises the payment from within their Bank’s mobile app.
The customer and the business receive confirmation that the payment was authorised and will be processed.
Check out our announcement video to see the full Fire Open Payments Terminal flow in action here.
fire.com is one of the UK and Ireland’s major Open Banking providers. To get your hands on the Open Banking Terminal by Fire and start accepting Open Banking Payments today, set up a free business account and download the Fire Business Mobile App today.
How fire.com brings value to businesses with real-time FX transfers
Circit is an online platform that helps audit firms perform higher quality audit engagements, collaborate with clients, and instantly verify assets at source.
Circit’s challenge was to find an online account provider that would allow them quick access to multiple accounts, allow them to easily receive payments in both euro and sterling as well as provide a competitive rate for foreign exchange services. Finding an instant FX solution with effective pricing was a core point of consideration when they were looking at potential solutions.
The other aspect that Circit needed to consider was to keep account reconciliation as simple as possible.
FX Transfers is one of fire.com’s core features on our platform. When Circit signed up for a free fire.com business account, they were able to avail of our multiple accounts and instant FX transfers with the ability to receive money in both currencies, all at a competitive rate. As well as offering these features, fire.com were able to assist Circit get setup easily with our support team.
Today, Circit have met all these needs with fire.com’s business account. The account also provides compatible uploads for Circit’s finance system as well as providing enhanced security features on all of their Fire accounts including multi-factor authentication and real-time notifications on account activity.
Creating multiple accounts in real time – Circit creates new fire.com accounts (with unique IBANs) in real time, without the need to go through an application process.
Real-time foreign exchange at an interbank rate– Circit now has the ability to convert funds instantly at a competitive rate 24/7, with adjusted pricing as volumes increase.
Access to a range of payment services – Circit now has access to Faster Payments and BACS for Sterling payments and SEPA for Euro payments.
Enhanced security and control – Circit uses multi-user authorisation for approving all transactions for increased security and control. In addition, Circit receive real-time notifications when payments are made or received into their fire.com accounts.
Efficient customer support – a trained support team, available via phone and email, quick to respond to questions.
Testimonial – Q&A with Circit
What attracted you to a Fire Business Account and what was the challenge or problem that led you to seek out an enhanced business account?
Quick access to accounts, and payments in new currencies. We needed access to a bank account in a new currency at short notice, to allow us to make and receive payments – we are able to do this instantly with Fire. Fire allowed us to set up a GBP bank account quickly and easily, so that we could serve our UK customers.
What features do you make best use of or like most?
FX – quick and easy to move funds between currencies, same day payments
“Fire allowed us to quickly open new bank accounts as needed. The instant FX transfers are quick and convenient, and help us to manage our cash flow. Reconciliation is simple with the compatible uploads for our finance system, and I love that we get notifications when payments are made or received!”
– Clodagh Vance, Chief Financial Officer
The Circit website can be found here.
The Dream that Might Still be Open Banking
Open Banking was, at one time, set to give consumers access to their bank and e-money accounts with the ability to share information and initiate payments via regulated third party providers. It was a great ambition to bring competition, innovation and a new set of players into the market. It was envisaged that fintechs would bring new benefits to businesses and consumers, allowing secure ways of sharing information and making online payments. It would herald the end of screen scraping and move the industry to API based integration. There are countless benefits that these changes would bring.
A few years on, we find ourselves at a crunch point – a critical time for the era of open banking.
How it started
As a digital account provider, Fire are particularly interested in the payments aspect of open banking. In fact, our interest in open banking payments stems back over ten years. Fire was initially a part of a card based payment gateway business for online retailers called Realex Payments. Back then we set up Fire to be the “collections” account for retailers who wished to get paid when accepting payments directly from their customers’ accounts, rather than accepting cards. Account-based payments remain a major payment method in various countries across Europe.
The arrival of the second Payment Services Directive (PSD2) and its associated Regulatory Technical Standards (RTS) created the legal and regulatory environment for new account information (AISP) and payment initiation service providers (PISP). We became regulated for both account information and payment initiation services, knowing that account-based payments worked extremely effectively in other regions. We also could see that account-based payments were a preferable option for certain retailers to be paid by consumers.
Account based payments offer huge benefits for both retailers and consumers. These benefits include better security, less sharing of sensitive data, lower fraud, potentially lower processing costs and faster settlement times for payees (retailers). Driven by our experience and seeing the underlying value proposition, we set about building Fire Open Payments, an open banking payments solution for retailers to accept payments directly from their customer’s accounts.
How it’s going
In terms of how open banking payments are progressing, it’s a very different story in the UK and the EU. Fire operate and are regulated in the UK and the EU. At a recent UK Open Banking event, a speaker noted that there were as many TPPs active in the UK as there were in the whole of Europe.
The UK has become the undisputed leader in Open Banking. The creation of the Open Banking Implementation Entity, via the CMA, has led to the development of a coordinated approach by the nine largest UK account providers (ASPSPs). This gave rise to the creation of the first era of open banking in the UK. While It is by no means complete, the fundamental building blocks are solid. In addition, the ecosystem remains open and engaged. All stakeholders – from consumer groups, regulators, trade associations, account providers and TPPs are participating in healthy discussions about how best to shape the future. The possibilities for open banking payments remain very strong in such an ecosystem with numerous issues on the agenda, all of which are monitored by regulatory eyes.
In the EU and specifically in Ireland, where Fire is based, the adoption of open banking payments is at the other end of the spectrum. Open banking has not yet taken off. So what’s gone wrong?
To make open banking payments a reality, the ecosystem needs to see a standard implemented in a consistent way. This ecosystem should encourage account providers and third parties to interact and attempt to implement a customer experience that is not just compliant, but a frictionless experience. The UK outcome has clearly demonstrated that this is possible. The fact that the Irish market has not achieved the same level of success as the UK has nothing to do with regulation. The delay in implementing an acceptable user experience by some Irish account providers, when their customers are accessing their account via third parties, has had a serious and detrimental effect on Ireland’s open banking ecosystem. This has been a major barrier for fintechs to bring new benefits to businesses, consumers and the economy at large. The fact the the UK based customers of these institutions enjoy a better experience confirms that the capability exists and leaves us all to wonder why this situation has evolved. Meanwhile, Irish businesses and consumers are being denied the benefits of open banking payments. To put the situation into context, we had a client who was accepting open banking donations that had a conversion rate of 4% with one Irish bank.
What to do next
In terms of what should happen next, we see the UK and Irish markets with a different set of priorities.
In the UK there is recognition of the excellent work completed to date, along with a sense of reality that we are still at the early stages in the development of open banking payments. With the CMA order coming to a rightful close, a transition period will need to be managed as a new entity emerges to carry on the work of the OBIE. This process is currently underway. In addition, specifically in relation to payments, we see this as an opportune time to identify and discuss any barriers and accelerators that could fuel the adoption of open banking payments. Issues such as fragmentation of the market, API uptime, implementing a decoupled experience, devising limits for open banking payments akin to contactless payments, enhancing the exchange of data at payment initiation time to assist with fraud and how variable repeat payments could be rolled out to the full ecosystem and apply to more use cases. These are great topics to be discussing as they all build on what is already in place. We believe the other aspect of open banking payments in the UK that needs consideration is the status of the payment pillar within the new entity. The concept of this being a “Payment Arrangement” is worth examining as it could help to ensure that there is a governance and operating model that is inclusive of all players. This would mean that open banking would have the appropriate level of regulatory oversight.
For the Irish market, there are different actions that we would suggest. Given that the market is behind in its development, we believe that some policy oversight is required. As things stand, TPPs have no indication as to when the issues will be addressed, rendering market and sales planning a fruitless exercise. Leaving the market to sort itself out will delay the delivery of a vibrant open banking ecosystem and continue to deny businesses and consumers the benefits of cheaper, faster and safer payments. Unlike the UK, the Competition and Consumer Protection Commission (CCPC) in Ireland has not issued any remedies to address the issues. However, such action may not be necessary if the CCPC, the Central Bank of Ireland (CBI) and the Department of Finance were to coordinate a forum and express their clear expectations with respect to the development of open banking payments in Ireland. Such an action would be the first step and could potentially be sufficient to address the issues. The problem is, who will take the first step?
Colm Lyon – CEO & founder
The Joe Duffy Group – leveraging multiple debit cards and accounts with Fire to help better manage expenses and budgets.
The Joe Duffy Group are a major car dealership based in Ireland.
Joe Duffy Group is Ireland’s leading motor retail group and currently has 23 Nationwide locations representing 17 brands and employing over 500 staff. Wanting to centralise corporate card expenditure for their multiple dealerships throughout the country, The Joe Duffy Group needed a secure solution that could provide them with multiple accounts and debit cards for their staff to use, and at a price that made sense.
With the ability to instantly create multiple debit cards and accounts via Fire account, Fire were able to provide the Joe Duffy Group with an out of the box solution that immediately catered for their staff expenditure needs.
The Joe Duffy Group are now able to manage multiple sites across the country with a centralised finance solution, which reduced their administrative burden. The Fire desktop and mobile application has provided them with a user-friendly method of opening new accounts and ordering debits cards as required. Each Fire Mastercard® debit card can be linked to specific sub accounts, and blocked/unblocked as needed, providing fine-grained control over expenditure for the Group.
Creating multiple accounts in real time – The Joe Duffy Group creates new Fire digital accounts (with unique IBANs) in real time, without the need to go through an application process.
Instantly add debit cards and users– manage accounts, change user permissions and order more cards using the firework online web portal.
Access to a range of payment services – Faster Payments and Bacs for Sterling payments and SEPA for Euro payments.
Enhanced security and control – The Joe Duffy Group uses multi-user authorisation for approving all transactions for increased security and control. In addition, Joe Duffy Motors receive real-time notifications when payments are made or received into their Fire accounts.
Efficient customer support – a trained support team, quick to respond to questions.
Testimonial – Q&A with The Joe Duffy Group
Why did you choose Fire over other providers?
For the Joe Duffy Group, the costs of operating accounts with debit cards via Fire compared to other solutions/operators presented a tangible opportunity to maintain control over expenditure in an efficient manner to suit the business needs without incurring excessive account maintenance or transaction charges.
Since selecting Fire, the Joe Duffy Group experience with the Fire customer support team has been overwhelmingly positive – the team are particularly responsive and attentive to our requirements.
What was the challenge or problem that led you to seek out an enhanced business account?
Operating credit cards across multiple sites resulted in a significant administrative burden for our business and was challenging to manage in a control effective manner.
How is the Fire Business Account helping you to solve those problem/s?
By centralising corporate card expenditure requirements to a single platform of online bank accounts and debit cards with Fire, we have improved our expenditure control effectiveness and reduced the administrative burden for the Finance team.
“Fire has enabled the Joe Duffy Group to operate more efficient and secure processes for making online and card payments which has enabled the team to focus on delivering the best value and service to our Sales and Aftersales customers. The ease of use of the Fire secure mobile app with realtime transaction notification and reporting has empowered the Joe Duffy Group to drive its business forward with confidence in our payments partner. Fire’s excellent customer service through their support team ensures that on the rare occasion that queries are raised, these are attended to and resolved by Fire without delay – the Joe Duffy Group holds customer satisfaction as a cornerstone of our business and it is clear from our experience that Fire operates with a similar focus – a strong partnership based on common goals.”
– Barry Keogh, Group Financial Controller
The Joe Duffy Group website can be found here.
From 1st April 2020, fire.com Mastercard® debit card holders can now make contactless card payments of up to €50.00 / £45.00. This change is part of an industry-wide movement to help prevent the spread of Covid-19 by reducing the need to enter PIN codes on card terminals or handle cash.
The increase from €/£ 30.00 is being implemented across the payments sector with the hope that minimising the handling of cash and reducing physical contact with payment terminals and cash registers, as well as cutting queue times when purchasing goods, will have a positive impact on our collective wellbeing.
In order to use the feature, the software on card payment machines must also be updated to accept the new limits. This is occurring gradually across the retail sector. Grocery stores that have successfully rolled out the update include Asda and Iceland.
The contactless limit was increased for all fire.com debit card holders on Wednesday 1st April with no disruption to services. fire.com will ensure it responds appropriately to Covid-19 and take any actions that help protect our customers. For further updates please visit our dedicated COVID-19 page.
If you’re thinking of setting up your own e-commerce business, online marketplaces can be a good way of reaching a wide audience at a comparatively low cost, leveraging market trust and gaining access to tried and tested commercial models.
One of the more popular online marketplaces is Amazon. Through its Amazon Marketplace network, vendors can access over 2.5 billion monthly customers and 24 years of lessons learned.
There are three main ways you can use Amazon Marketplace to set up and run your business:
- Selling on Amazon
- Fulfilment by Amazon (FBA)
- Merchant Fulfilled Prime
Selling on Amazon is a no-commitment plan that gives you access to all of Amazon’s clientele, your own hosted page and the ability to sell directly into most of Europe.
With FBA, you leverage Amazon’s operations to store, ship, stock and fulfil orders. As the seller, your responsibility is to send stock to Amazon’s warehouse, and, from there, Amazon will take care of the rest of the supply chain – including processing returns and customer support. FBA comes with added benefits such as the opportunity to feature at the top of a search page and having your product pages stamped with the trusted ‘Fulfilled By Amazon’ badge.
The final model is Merchant Fulfilled Prime, which is where the seller uses Amazon’s Prime features and benefits only, taking care of stock and fulfilment in-house.
There are many resources that can support you to get started selling on Amazon. A good source is Marketplace Superheroes. Their programme walks you through how to start and grow a global business on Amazon from scratch. The course not only teaches you how to sell, but what to sell – as well as providing support from experienced Amazon sellers.
Once your business is set up on Amazon, you may want to think about opening a business current account to make it easier to keep track of spending.
Many online Amazon merchants find the fire.com business account a good fit, as compared to traditional current accounts it’s quicker, and simpler, to open. Once the team has approved your online application your new digital account should be live and ready for use within 48 hours.
Other suitable features include:
Dual currency euro and sterling account – When opening a fire.com business account you are automatically given a euro and a sterling account. The sterling account has its own sort code and account number, while the euro account has an Irish IBAN. This means that payments received from EU Marketplaces can be routed to your fire.com euro account, while products sold on Amazon’s UK website can be paid into your fire.com sterling account, avoiding extra FX charges.
24/7 access and control – With the firework mobile app and web portal, users can access their account anytime, anywhere. All of the fire.com business account features are self-service. You can easily make changes, such as opening another account, in euro or sterling, at the touch of a button. It’s ideal for e-commerce sellers who need a fully digital, on-demand payment solution to complement their web-based business.
Full visibility – Event-driven notifications alert fire.com account users to activity within their accounts in real-time. With a fire.com account you can gain peace of mind knowing when you’ve been paid and that actions have been completed successfully. For many Amazon Marketplace sellers, their online business is an additional revenue stream and not their full-time job. Knowing that payments are being made without having to sign-in is an ideal feature for time-strapped merchants trying to balance their marketplace business with other priorities.
Taking the plunge into entrepreneurship and setting up your own marketplace business can feel daunting, but there are many resources you can tap to ensure you get off to the best start possible. It’s always useful to start by finding an existing group or network that has been on the same journey as you and leveraging shared knowledge. Once you are armed with lessons learned, think about priming your business for growth by ensuring all of your processes are built to scale. This can be achieved on the payments side by opting for an account provider that has invested in features that look to simplify incoming and outgoing payments and make it easier to get paid across borders.
Discover how we’re helping Straight Teeth Direct™ scale globally by providing payment services in euro and sterling with a Brexit-ready business account.
If you are a UK business that regularly sells into the eurozone as part of your business model, or occasionally receive an invoice euro, having a pool of funds in the relevant currency to trade with will not only allow you to avoid foreign exchange fees, it should also speed up the time it takes you to settle transactions. Across the UK there has been a steady increase in business customers opening euro accounts, with June 2017 seeing HSBC experience a 23% uptick in one month alone. The increase has in part been attributed to Brexit, as UK companies prepare for a future where they may have to trade domestically and in the EU in very different ways.
How to get a euro account
There are a number of options for getting your business set up with its own euro account. The traditional route would be to enquire with your high street bank. Most of the major institutions offer international accounts for business customers. However there are now numerous competitive options offered by “fintechs” (financial technology companies). These smaller, digital-first organisations are regulated, and are more agile in the way they operate and have less overheads with no physical branches, meaning their euro accounts are often cheaper and come with special features not yet offered by the larger banks.
Questions to ask providers as you shop around for a euro account
- What is the fee structure?
Fees for foreign currency accounts may include set monthly fees or fees for processing incoming/outgoing payments. Some providers may require you to carry out a certain level of transactions every year.
- Is there a minimum held threshold?
Often providers will request that you hold a certain amount of funds in your account and will charge you if your total held dips below this amount.
- What rate do you offer for foreign exchange?
Look for a euro account provider that offers the mid-market exchange rate and transparent, competitive pricing for foreign exchange services. Oftentimes fees aren’t communicated upfront and are added later as a markup. Ask for explicit information before opening the account and avoid unexpected charges later down the line.
- What compensation guarantees do you offer?
Enquire about compensation and how your account will be protected should anything happen to the provider. You should determine whether your cash will be ring-fenced in a protected space and decide which level of risk is appropriate for your company.
The benefits of a euro account
A euro account will allow you to bill your customers and get paid in euro. It also enables you to avoid some foreign exchange fees if you have both incoming and outgoing euro streams. If your customer pays you in euro, you can use these funds to pay for any outgoings in euro, or you can hold the funds in euro. Other benefits of a euro account include increased settlement times and greater insight over buying behavior in international markets.
No setup or monthly fees with a fire.com euro account
With the fire.com business account, you can set up multiple euro and sterling accounts to receive and make payments – providing another way to further separate funds. Each account comes with its own account number & sort code or IBAN, and can be controlled centrally from your account. You only pay as you transact – there are no monthly or annual fees – and the foreign exchange rate is set at the mid-market level, so you know you’re always getting the best deal. If you need to pay and get paid in euro, a fire.com account is a great fit.