Open banking is a rapidly emerging payment method for ecommerce. It is a valuable addition for your point of sale, allowing you to receive instant bank payments without having to rely on costly card processing and streamlines the customer payment journey.. Because it relies on the customer securely authorising payments via their banking app or online banking, no account details are shared which reduces the risk of frauds, reducing merchant risk and chargeback costs.
But what are open banking powered instant payments, and how do they work?
Open banking is the outcome of key regulations designed to improve financial services for consumers and businesses. These regulations mean that regulated Third Party Providers can offer “Instant bank transfers” or “Instant payments”. In practice, this enables customers to pay businesses via bank transfers, but without the long winded process of having to copy details into their banking app, double and triple check all these details are correct and then make the payment, but instead just follow a link generated by the merchant which specifies the details of the transaction (e.g. recipient bank account and transaction amount), securely log into their banking app or online banking with face ID, fingerprint etc, and authorise the payment quickly and securely.
In the UK, these payments are made instantly at any time of day, every day of the yea as they are processed as Faster Payments. This means that businesses will receive the money into their account in seconds, not days.
Key benefits of Open banking instant payments for ecommerce merchants
Implementing open banking on your website could be a means for you to retain more customers and increase conversion. In fact, a recent study by The Open Banking Implementation Entity (OBIE) revealed that 50% of small businesses in the UK use open banking services.
To help you better understand the appeal of open banking instant payments for your e-commerce store, we’ve put together a list of some of the benefits:
1. No card details needed
Payments are made directly from bank accounts. This means that the payment is made instantly and does not require you to wait days or weeks to receive the funds from your customers, which can be the case when using traditional solutions like credit cards. It also means that no card details or personal data are stored, protecting your customer’s personal information and reducing he risk of fraud.
2. Higher conversions
The ease of the payment process means that your customers are more likely to convert. How many times have you seen a person ready to buy an item only to be put off by the cumbersome and often complicated payment process with endless forms to fill out? With open banking, the information is readily available in a secure manner and does not require your customers to fill out forms that might make the point of sale off-putting. The payment process becomes fast, easy and hassle-free.
3. Bank-level security
When discussing any form of payment on your website, maintaining security is a priority because it protects you and your customers. With fena we have Open banking and PSD2-compliant APIs which guarantee secure access to the financial system every single time a transaction is made.
4. Save on fees
When relying on card payments for your e-commerce sales, you might receive less than you expected given high fees associated with card transactions. With fena, you only pay 0.3% of the transaction value in fees, saving you over 85% on traditional card payments. And there are no additional setup and terminal costs. This is substantially lower than most payment providers charge. Not only this, but as there isn’t a long chain of participants in the payment journey all taking their cut, as there is in traditional payment methods,you will receive your funds instantaneously with no additional charges.
fena’s plug-in is easy to install on your WooCommerce store.
With fena you can add instant bank payments directly onto your site without needing expert coding skills!If you used WooCommerce for your site, you can quickly integrate the fena payment gateway into your checkout usingplug-ins that work seamlessly with your pre-existing e-commerce solution in 3 easy steps:
Install the Fena Payment Gateway plugin for WooCommerce
In the WP Dashboard, click on ‘WooCommerce’
Open a new window in the browser and go to: https://merchant.faizpay.com to create a merchant account.
Here’s an in depth guide detailing everything you need to know about installing our plug-in on your WooCommerce store. By using our WooCommerce plug-in, you can save up to 85% vs the fees charged for card payments, receive funds instantly, and convert more users.