Ecommerce: 3 things to consider in an open banking payments provider

Andy Tweddle, Payments writer
31 Aug 2022
Iconography of a globe, a cart and a calendar

As a payments product buyer in the ecommerce space, you’ll be acutely aware of the problems caused by traditional online card payments and manual bank transfers. Card payments have high fees, high failure rates and come with the risk of excessive chargebacks. Manual bank transfers are cheaper but have a poor user experience that is at odds with modern ecommerce.

At the same time, you’ll also know that online retail is booming in the UK and across Europe. Over 25% of all retail sales in the UK now happen online, with many countries in the EU following closely behind.

That presents open banking, with low fees, high payment success rates, instant settlement and baked-in security as a modern alternative for your ecommerce brand. But how do you choose the right open banking provider for your requirements, especially as open banking technology is evolving and changing rapidly?

Whether you’re looking to add open banking payments as part of a best-in-class checkout or as a standalone payment method, keep the following aspects in mind when selecting your ideal partner.

This article is based on our buyer’s guide to open banking payments. Read the full guide for an in-depth look at every stage of the buying process and a full list of questions to ask your potential providers.

1. A high-converting payer experience

Payer experience can be defined as the quality of the customer’s experience when using an open banking payment. Your provider should be able to guide you on how to:

  1. Position your new payment method so it gets a high share of checkout

  2. Build a payment flow that converts consistently

Achieving this involves a mixture of UX best practices, robust testing programmes and consistent dialogue with banks. Things you should specifically look out for include:

Tried-and-tested bank selection and consent screens

Part of every open banking payment journey — the authorisation step — is dictated by the banks rather than the provider you choose. But the two parts of the open banking payment flow that your provider does control are the bank selection and consent screens.

The bank selection screen is where the user chooses from a list of available banks, after which they are redirected to their selected bank to authorise the payment. The consent screen informs the user of the information needed to complete the payment, and they give their consent.

Your provider should have optimised screens for both of these, as well as advice on how to combine them with bank authentication screens to create a consistent payment journey that converts well.

Best practices for driving open banking adoption

Adding open banking payments to your payment page isn’t just about what happens when a payer has already chosen the open banking-powered option. It’s also about ensuring your customers understand what open banking offers them compared to other available payment methods and why they should choose it.

Your provider should advise you on the language to use, such as what to call your payment method — should it be ‘open banking payments’ or ‘instant bank transfers'? They should also offer advice on structuring your checkout page to make it clear that the open banking payments are convenient, familiar and secure.

buyers guide improving clarity
An example of how increased clarity drives open banking adoption

Ask your provider

  1. What is a typical conversion rate for use cases like mine?

  2. How do you ensure bank selection screens and consent screens are compliant and optimised for conversion?

  3. How can I maximise adoption of my new payment method?

2. A comprehensive mix of features

At its core, your open banking payment method will allow you to collect a payment from a shopper directly from their bank account. But that’s table stakes. From the moment a website visitor decides to buy something, to the point where they request a payout, withdrawal or even a refund, having features that address these steps in the journey can improve their overall shopping experience.

For ecommerce merchants, there are a few features in particular that could enhance the open banking payment experience you’re building:


Shoppers increasingly demand rapid refunds, with 81% of shoppers now expecting a refund from an online purchase in a week or less. To meet customer demands, some providers, including TrueLayer, have built on top of basic open banking infrastructure to make automated, instant refunds possible — all within a closed-loop system.

Payouts and withdrawals

Like with refunds, paying your customers instantly is another way to improve the end-to-end payment experience. Instant bank payouts and withdrawals also build trust. TrueLayer customer Cazoo, for example, uses payouts to pay for 100% of the cars it buys directly from customers.

Recurring payments

Variable recurring payments (VRP) are an additional open banking functionality that banks need to build. It enables providers, like TrueLayer, to initiate a series of payments for a customer at variable amounts and intervals. If your business would benefit from offering recurring payments, like subscription payments, invoices or instalments, open banking VRPs could become a powerful alternative to continuous payment authorities (CPAs), card-on-file, and direct debit.

Ask your provider

  1. Do you offer [feature] functionality as part of your open banking payments product?

  2. In which countries is [feature] available?

  3. What emerging open banking payment technologies should my business be considering?

3. The right integration options for your business

The integration process — turning your proposed payment experience into a working system that your customers can use — should be quick and match what was offered during the sale. But what does a good integration process look like?

Direct integration or developer tools?

There are several ways to connect your new open banking provider to your business. The most common way is with an application programming interface (API). One way to integrate is through a direct integration, which can be highly customisable but may also require considerable technical expertise and time.

Another option is integration tools such as hosted payment pages (HPPs), software development kits (SDKs) and client libraries. These are slightly less customisable, but all make the integration process smoother and easier for developers — perfect if you have limited development time.

A detailed timeline and clear stakeholders

Every integration is unique, but a good direct integration, where both sides are able to focus on the process and have agreed on the deliverables, should take around six weeks from kick off to go live. On top of that, using SDKs and HPPs could save an additional one or two weeks of integration time.

A good integration project will include a full list of stakeholders and milestones. This process should actually begin during the sales process, so there’s no delay in launching your open banking experience when you commit to that provider.

Ask your provider

  1. What’s the best way to integrate your solution to build our use case, taking into account my available developer resources?

  2. How long does a typical integration for my use case take from start to finish?

  3. Can you supply a template or example of a typical integration process?

What else should you consider?

Every ecommerce business will have its own use case and exact set of requirements. But depending on what you want your new open banking payment experience to achieve, there are a few specific aspects you should focus on.

If you’re expanding across Europe, or if you already sell to customers in more than one country, then make sure you ask about coverage. Coverage is the proportion of your existing and potential future customers that you can collect payments from, and potentially pay out to, using a particular provider.

Specifically, look for the ‘banked population’ of each country you plan to serve. Banked population is the percentage of a country you can reach with a provider, and it gives a true reflection of coverage. Some providers use the number of banks or even the number of bank branches as a proxy for coverage, but without knowing how many customers each branch serves, it doesn’t really help.

buyers guide banked population
Banked population vs number of banks or bank branches

And as important as it is to get your new payment experience up and running, it’s also worth making sure your provider can offer ongoing support. That could include a dedicated customer success manager to advocate for your business’ needs, or strong reactive customer support with a clear process for emergencies.

Ask your provider

  1. What percentage of the banked population does your service cover in [country], and how do you plan on increasing it?

  2. Will I work with a customer success manager, and how will they support my business?

  3. What hours and in what languages is your customer support available?

  4. How quickly do you respond to and resolve critical issues?

Your guide for finding the right open banking payments provider

The buyer’s guide to open banking payments is your handbook for finding the right open banking payment partner for your business. From understanding what features are needed for your exact use case to advice on how to integrate open banking payments into your customer journey, the guide covers it all.

Read the full guide and learn which aspects of the overall payment experience are key to your brand’s success, and which provider can help you build it.

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