We are starting the Q&A series about #openbanking.
Its primary purpose is to bring to your attention in an accessible and easy-to-understand language the changes introduced in financial services by the new PSD2 regulations as well as the opportunities that come to help your business.
In the following articles, we will find answers to issues related to PIS (Electronic Payment Initiation Services) and AIS (Account Information Services).
We'll start with some curiosities about Payment Initiation Services (PIS)
With OPEN BANKING, you eliminate the manual operation of OPs. Customers initiate payment from the e-invoice, the OP is pre-filled and automatically sent to the bank through the open banking channel, and customers quickly authorize. The merchant receives the payment status right in their app. No manual operation, no proof of payment sent by email. Simple, automatic, secure, and confirmed.
Direct online payments, without intermediation by payment processors, are also regulated in Romania. Customers initiate the online payment from their account to the store account right at the checkout step, where they no longer need their bank card. Select your preferred bank and authorize the payment. And the commissions are the lowest in the market.
From your invoicing system, you can generate invoices with Payment Link and QR Code options for direct payment from Account to Account. The customer chooses the preferred payment option, selects the bank from which he wants to pay, and authorizes it. You must add Open Banking payment initiation to your billing system.
Consumers no longer have to make manual transfers from their accounts or search for their card whenever they initiate an online payment. The payment experience comes down to selecting the bank they want to pay from and authorizing the payment. A short and simple checkout experience increases consumer satisfaction.
For the first time, merchants can adopt a payment method that significantly reduces the costs of online transactions. Through direct payment, account-to-account, Open Banking, and the absence of intermediaries - card issuers, card networks, and card payment processors - the cost of online payments decreases even by 2X.
While the open banking payment flow is unique, merchants can incorporate it into:
A: Payment on the spot, at checkout.
B: Payment by PO gives consumers a 2-3 day deadline to make the payment.
The communication of data in a payment flow through Open Banking takes place through APIs instead of the human user, and the data is encrypted against fraud and cyber-attacks. Paying through Open Banking is the only smart and most secure payment.
Data exposed to merchants is not sensitive enough to be targeted by fraudsters for unauthorized payment.
Open Banking payment service providers communicate securely with the customer's bank to transmit the payment details and initiate the payment.
The instant nature of the payment through Open Banking depends on the banks participating in the transaction. Transfond partner banks are the banks that offer instant payment—fast payments, fast cashouts - in just seconds.
If you have any other questions in this area, leave your question in the comment section, and we promise to include it in the following article.