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BUSINESS FOCUS Flying the flag for Open Banking


“When we explain why we are doing this, most customers are hugely supportive.”


anyone. We don’t know the customer’s bank details because they authorise the payment via their own banking App which we have no access to. It’s also a far quicker administration process. For example, because the payment reaches us instantly, if need be, we can do an instant refund, whereas on the card system, if the plumber has paid for a big job on a card that we, for whatever reason, have to refund, it can take seven or eight days to get back to them which is awful for their cash flow. “In 2023 we saved £100,000, this year’s target is £200,000, and take-up is growing at the kind of rate that will make this very achievable.”


Some of the benefits aren’t immediately obvious to customers though, so Williams incentivised take-up, offering the chance to win up to £250 in vouchers for every time a customer uses Payit.


“When we explain why we are doing this, most customers are hugely supportive. They understand that we can’t just absorb £1m a year on card fees, that will effectively end up being split between us having lower profits and them having higher prices.”


So evangelical is Mann about the benefits of Open Banking that he was awarded a Pioneer Award, for going “above and beyond his day job to drive Open Banking adoption in an omni-channel fashion” at the Open Banking Expo Awards in 2023.


“We really want to broaden this out to the wider merchant industry,” he says. “The food wholesale sector has picked this up very quickly, probably because their margins are already squeezed incredibly thin. I’ve been working to get NMBS and PaybyLink together so that we can bring it to a wider merchant audience, and get it working in at least the


Payit™ by NatWest surveyed 150 business leaders across UK organisations with an annual revenue of £2 million or more. Those using Open Banking amongst their payment systems reported spending a monthly average of 44.5 hours on finance tasks compared to just over 57 hours spent by those who don’t. Across the year this comes to more than 150 hours, or over four working weeks.


The survey also found that businesses without Open Banking typically spend £1,687 more on payment processes annually, and £1,117 more on card processing fees: which is an 8% difference in spend annually.


Just over a quarter (26%) of those using Open Banking view late payments as a top issue, compared to over two in five (42%) of non-users reporting this. Respondents said that having access to the real-time data provided by Open Banking would help develop customer experience (39%), improve payment efficiencies and reduce operational costs (37%). However, the report unearthed barriers, with almost half (48%) having concerns about cybersecurity risks.


This is despite Open Banking’s security profile being based on Finance Grade API specifications, similar to bank level security, and being regulated by the FCA or a National Competent Authority.


Mike Elliff, CEO at PayIt by NatWest, said: “It’s encouraging to see UK businesses embracing open banking and benefitting from the operational and cost efficiencies it can bring. We hope to see this awareness and adoption of new payment solutions grow and would encourage businesses to give it a go. While the concerns around security and fraud are apparent, businesses can be confident that Open Banking is based on the security inherent in your online or app-based bank account. Wider understanding of this could help tackle barriers to implementation and open opportunities for businesses to lower operational spend and move closer to their objectives. As the financial landscape evolves, companies embracing the technology stand to gain a competitive edge in the ever-changing business environment.”


1,200 NMBS members. The more ubiquitous this becomes, the better it is for everybody. It took contactless a while to take off because people didn’t trust it but that is now more or less standard.”


The next step is a completely frictionless version of this, which Mann says is now being trialled. “It won’t be around until next year, but that will get us to the better-than-contactless user experience. One of the things we liked about this system is that the authorisation method is something that people already understand, it’s their banking app and they get that it is super-secure. When you’re talking about payments that could be thousands of


March 2024 www.buildersmerchantsjournal.net


pounds, you do want that assurance that it is secure.


“What started out for me as an experiment in my desperation to get something done about card fees, has turned into quite a serious project, and we have proved over that last three years that we can make this grow without hurting anyone, without doing anything to our service levels. It gives customers more choice, the technology at our end is relatively easy to deal with, and doesn’t require our customers to get their heads round something that they aren’t already familiar with anyway. Plus, it can take so much needless cost out for merchants, adding benefit to the bottom line.” BMJ


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