Open banking in Europe offers both banks and FinTechs new opportunities

Influence of PSD2

PSD2 lowered the barriers for market entry to third-party service providers and FinTechs and opened the door for innovative players to offer services that did not exist such as account information services, third-party personal finance management, digital identity services, automatic onboarding, and AML/KYC. Most providers are registered to deliver account information services, such as account aggregation and credit decisions, while the provision of payment initiation services lags behind.

The UK continues to lead the way with Open banking development.

Benefits of Open Banking Payments

The appetite for payment initiation services is growing across the region as a means to make the experience of paying bills, sending money to other people, and making online purchases more seamless and secure. The high cost of card payments is the biggest pain point for many retailers. This cost comes from the processing fees and the high number of chargebacks associated with the increasing volume of returns, as well as the increased risk of fraud. Shoppers can connect directly to their bank account at the checkout, so that payment can be taken within seconds. Payments are authenticated directly with the bank. There’s no need to enter card details.

Why Retailers switching to Open Banking payments from cards

It is advantageous for the merchant too, as funds are received immediately allowing them to ship the goods with total confidence. Open banking payments lowers the cost per transaction while also playing an important role in building a smoother checkout experience that increases conversion as retailers create the intuitive online experiences their customers expect.

Upgrading the open banking experience has also improved the refund process; removing friction and delay to make refunds as instant as the initial checkout payment.

Examples of the payments type:

  1. Instant and faster payments Account-to-account (A2A) payments
  2. QR-code payments
    Integrating QR-code payment into this process will deliver a new level of customer service and convenience.
  3. Social media payments
    The use of social media as a marketplace for used items and for sending funds to friends and family is a huge yet untapped market. Open Banking can facilitate the integration of payment functions into social media.
  4. Gaming
    Users are looking for faster and easier in-game micro payments with a secure and trusted partner channel.
  5. Invoice payments
    Using Pay by Link, businesses have the opportunity to accept and receive payments anywhere and reduce friction in the entire payment flow.

We invite Third Party Providers for cooperating with UBSLogic where our IT engineers will handle API integration to develop innovative UX in digital finance for customers.
Get in touch with us at, and our engineers will help you to handle your migration.

#openbanking #psd2 #payments #transfers #checkout

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