Brian Hanrahan, CCO, Nuapay, believes Open Banking payments are set to accelerate in 2020.
To date, the Open Banking conversation has centered on the data sharing element of the European PSD2 legislation and, more recently, on the Europe-wide delays to the implementation of Strong Customer Authentication (SCA).
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But we believe that 2020 will see a significant increase in the adoption of the payments side of Open Banking.
Huge appetite for open banking
We’re already seeing a huge appetite from merchants for the payments capabilities of Open Banking. Many of those we speak to were already incredibly excited by the speed, security and cost-effectiveness that Open Banking payment methods offer.
Now, they are also becoming increasingly impressed by the customer experience of the payment journey – an important precursor to adoption.
This year, Nuapay asked a hundred businesses in the UK and Ireland exactly when they expected to implement Open Banking initiatives. The results were striking.
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By GlobalDataNuapay’s survey results
97% of merchants expected to implement initiatives within the next year. Of these, 56% expected to do so within six months. Clearly, the UK is on its way to widespread Open Banking adoption.
Data from the OBIE backs this up, too. After languishing at only a few thousand transactions per month until the start of the year, PIS payments have started accelerating – growing on average more than 100% per month for the last six month. In September they grew by more than 50% to nearly 700,000 PIS payment calls.
Of course, this figure remains a fraction of the total number of online payments. But it also clearly demonstrates that Open Banking payments are now being used at scale in live environments. As merchant awareness continues to grow, the Open Banking payments revolution will gather pace in 2020.
For consumers, this will mean tangible improvements to payment experiences in 2020. Open Banking has the potential to redesign the way customers interact with transactions in-store and online – from social media platforms to eCommerce sites. As more merchants harness this technology, customers will enjoy a far superior and more seamless payments experience. In turn, increased expectations from the consumer will further catalyse more widespread adoption by businesses.
