The steady rise of Open Payments
April 21, 2021
Open Payments are hitting the mainstream – it’s time to look at adopting the new payment technology
Open Banking Payments are quickly disrupting the way we make payments online. By giving regulated third-parties secure access to financial information, it is shaking up an industry that has been difficult to access – inviting more competition and stimulating innovation.
‘More than 3 million people and businesses are using Open Banking-enabled apps and services in their daily lives.’
‘We’re beginning to see growth in Open Banking Payments. In 2018, 320,000 Open Banking Payments were made. This rose to over 3.4 million in 2020. In 2021, this has jumped dramatically, rising to 1.2 million monthly Open Banking Payments in January alone.’
What are Open Banking Payments?
Open Banking Payments are account-to-account payments that are initiated by the Payment Service Provider (PSP) directly from the customer’s bank account to the merchant’s bank account.
The core of Open Banking is based on customer consent. Open Banking allows customers to initiate a payment using their mobile banking app or online banking web portal. Funds are then transferred to the merchant using strong customer authentication without the use of a debit or credit card.
When making a payment, the customer can opt to pay by Open Banking if the business enables the new payment method. When you select to pay by Open Banking at the checkout, it is as easy as:
Select your bank from the list.
Authenticate with your bank and authorise the payment.
Want to try for yourself? Scan the QR code below on your smartphone camera or head over to www.fire.com/donate to make a small donation to Calcutta Connect to trial the Open Banking experience.
Why Should I Adopt it?
Open Banking Payments are both more cost effective and secure than a regular online payment for everyone involved in the transaction. It has been found that Open Banking Payments can be up to four times cheaper than card payments. The funds are also settled quicker than a typical card payment getting businesses their money sooner – it’s win/win for all parties involved.
Open Banking Payments also leverage new technologies such as making a payment via a QR code or URL link. For example, you can place a QR code on a menu, poster or even a website and the customer can pay by scanning the QR code on their smart device. Alternatively the customer can click on a URL link to take them to the payment page.
As the COVID-19 crisis has sped-up the development of online payment technologies, we are beginning to become a card-less society. Open Banking is at the forefront of this revolution and we are already seeing a huge surge of adoption here in Fire.
Lastly, it’s super easy to set up Open Banking Payments with your business with fire.com!
How do I Adopt Open Banking into my Business?
Fire.com is one of the UK and Ireland’s major Open Banking providers. In order to accept Open Banking Payments into your business, setup a free Fire.com business account where you can create new Open Banking Payment requests and integrate them with your business.
In addition to this, Fire.com provides access to our API which gives you the ability to automate the following processes for your business:
Initiate large volumes of bank transfers to any account in the UK or eurozone from your internal systems.
Embed account and transaction information in your inhouse systems, developing better financial control applications.
Receive event driven data from Fire, e.g. when a payment is received, so you can update your systems and reconcile faster.
Owen is the Chief Product Officer at Fire and is responsible for the core propositions, design, roadmap and roll out of new product to personal and business customers, as well as embedded solutions for other Financial Institutions and platforms.