Beyond PIS – different ways payments can benefit from open banking
It's time to rethink what open banking can do for payments. Instant income check, account verification, and risk insights: there are many ways to leverage open banking in payment journeys. Here's how technology is changing payments as we know it – beyond A2A and PIS.
There are many ways to leverage open banking in payments apart from A2A and PIS.
Instant account verification enables seamless onboarding journeys which reduces drop-off rates and increases conversion.
Real-time balance and income verification reduces fraud and eliminates chargebacks as you’ve verified customer income and ability to pay.
There's a reason so much of the talk about open banking focuses on account-to-account payments and payment initiation services (PIS). They are fast, safe, with no middlemen or unnecessary fees. But there are more ways businesses can improve their payments journey by leveraging other aspects of open banking. Such as seamless onboarding journeys, where you can verify a customer's account or income without friction. Let's dive further into the lesser known benefits of using open banking in payments.
Frictionless account verification processes
Onboarding customers can be a painful process, especially during the account verification step. Many of the commonly used methods of verifying customer accounts have high drop-off rates, as the customers don't want to finish a complicated verification flow. Who would want to manually fill out and send in physical bank statements when there's an option to verify accounts without leaving the webpage? Unverified manual input of account details also carry a significant risk, as there's always a chance of human error.
Open banking streamlines the process, cutting costs for payments providers as there’s no need to check in or follow up with customers to verify their details. Instead of days of waiting, high drop-off rates and massive friction, you can instantly verify account ownership with just a few clicks.
Reduce fraud and check balance in real time with open banking
Fraud remains a significant business challenge, especially for merchants selling high-end products. Due to the increasing sophistication of software which can forge documents, the need for a faster and safer way to do balance checks is greater than ever. Now, online businesses can check balance in real time and perform payouts immediately using open banking.
When you know the customer can pay, you minimise risk of nonpayment and avoid overdraft fees for your customers. Bank-grade authentication flows ensure the highest possible security standards, with minimal fraud exposure – and no chargebacks.
You can further minimise risk by accessing a potential customer’s transaction history. Such risk insights enable faster onboarding and take your prediction skills to the next level.
Unlocking the full suite of open banking benefits in payments
So far, we’ve only written about a fraction of the benefits open banking offers to businesses of all sizes. Streamlining onboarding promises to cut cart abandonment, becoming so seamless that the process becomes invisible to end users. Reducing incorrect transfers further protects businesses from needing to claw back money, whether as a result of fraud or human error.
By setting up open banking compatibility now, businesses can confidently offer more competitive services that benefit their customers. Companies can improve conversions at scale as new features and functionalities are released, helping them to make the most of open banking benefits in payments.
Access all open banking benefits with Tink
Partnering with the right service provider will be critical to accessing the full range of benefits for open banking. Curious about how open banking could help your business thrive? Find out what you can build with Tink.
More in Open banking
2024-10-08
6 min read
Lending essentials: how enriched data solutions help lenders tackle constraints
Enhancing your affordability assessment with Tink’s data-enriched solutions helps you put an end to inaccurate data, prevent fraud in loan origination and stay compliant – read on to explore the benefits.
Read more
2024-09-24
4 min read
Why Pay by Bank fits luxury retail like a glove
Pay by Bank offers a solution that addresses the potentially higher transaction fees and fraud risks while enhancing the customer experience for luxury retailers.
Read more
2024-09-03
5 min read
Customer interview – Nordea on consumer engagement
We spoke to Nordea Product Manager Sami Mikkonen about enhancing their mobile app using open banking technology, focusing on improving consumer engagement and financial management.
Read more
Get started with Tink
Contact our team to learn more about what we can help you build – or create an account to get started right away.
