The last few years have seen a surge in digital payments! We’re talking about $ 4.6 trillion in transactions in 2020 alone, a 19% increase from 2019 (The Global Payments Report 2021) making digital payments an integral part of setting up any business. The trend has further accelerated with the global pandemic driving a mindset shift in how consumers buy and pay for products and services.
For many businesses today, that means going through the long process of setting up costly payment networks, dealing with multiple intermediaries and having to face higher risk of fraud along with the chargeback fees imposed. With Open Banking payments, that is all going to change. Payments will be faster, more secure, cost efficient and much better for businesses.(Learn more about Open Banking payments in our previous blog here)
So, how does Open Banking payments like TG Pay can change businesses?
Here are the top use-cases that Open Banking payments enables:
- Bill Payments
Customers can make bill payments for utilities such as electricity, water or any other paid services and products directly from their bank accounts. With direct bank to bank payments, settlement times is reduced significantly for suppliers and shrinks the costs associated with setting up with payment networks. Additionally, each payment is secure as customers would be authorizing it through their own bank.
- E-commerce Check Out
For any online purchase the customer makes to the business, the business does not incur any chargeback fees that are usually associated with the traditional payment networks. Open banking payments reduce the risk of fraud and consequently the risk of hefty chargeback fees that is borne by the merchants. On the other hand, the payment method is also safer and easier for customers as they are not required to input their card or account details ever at check-out.
- Account to Account payments – (A2A)
Varied platforms and service providers can add easy bank to bank payment option for enhanced usability of their product. Whether it is moving funds between a user’s own accounts or making a payment to a friend, open banking enables it all.
- Account Funding Transactions (AFT)
Account Funding enables funds to be pulled from your bank account directly into other digital accounts such as e-wallets, personal financing applications, wealth platforms, pre-paid cards and neo banks. While the business provides a seamless user experience, it also provides a secure method for the consumers to instantly fund their accounts.
This is only the beginning of what Open Banking payments can enable!
Stay tuned to find out how Open Banking is set to revolutionize the consumer payment space!