Could Open Banking help me develop an own-branded payment facility for my business?
One of the key benefits of enabling Open Banking payments is that, dependent on your business model, you can reduce your reliance on expensive card payments and associated fees.<br/><br/>
Most established businesses are heavily reliant on the ability to accept card payments from customers but this is changing as more and more Alternative Payment Methods (APMs) become available. Open Banking is a type of APM as it enables you to take money directly from your customer's bank account without having to use the card schemes.<br/><br/>
There are numerous benefits to accepting card payments, including liability shift (see separate FAQ) but certain merchants that sell goods where liability concerns are less important (e.g. utility providers or online software subscriptions) could definitely benefit from Open Banking payments. A good example might be concert ticketing where the use of the ticket can be tracked and cannot be disputed.<br/><br/>
At the moment, merchants may not always benefit from the same level of protection that they would under the card schemes but this is gradually changing as new protections are rolled out.<br/><br/>
One way that Open Banking payments can greatly benefit larger merchants is when they have their own digital wallet, backed by an Electronic Money Institution (<a href="/glossarycollection/electronic-money-institution" style="color:#48277C;" target="_blank" title="Electronic Money Institution"><u>EMI</u></a>) payment account. In this scenario, the merchant uses Open Banking payments to fund the loading of the wallet at typically reduced load fees and can offer Open Banking initiated payments straight from the wallet.