How forward-thinking brands have put open banking payments into action
iwocaPay, Penfold and sync. reflect on how they’ve improved payment experiences with open banking.
When talking about open banking, we’re often laser-focused on what we still need to build and how that will help businesses and consumers of the future. But pausing to reflect on what open banking-powered products already exist, helps us understand the scale of the opportunity that still lies ahead.And according to JP Morgan, digital payments in ecommerce alone will reach €940billion in the UK and EU by 2023. Instant bank transfers (powered by open banking) have emerged as a low-cost and low-friction alternative to existing digital payment options.So how have businesses already taken advantage of instant bank transfers? TrueLayer CPO, Ossama Soliman, spoke with product leads and founders of some of Europe’s forward-thinking brands to look at how they’ve been able to turn open banking potential into real payment experiences. He was joined by:
- Olivia Denyer, Product Lead at iwocaPay
- Ricky Lee, Founder & CEO at sync.
- Josh Queen, Lead Product Manager at Penfold
Industries and use cases continue to multiplyiwoca allows small businesses to easily and quickly borrow money, while sync. lets users budget and manage their money in one dashboard. Penfold is a digital alternative to traditional pension companies. None of these businesses operate in the same industry and each has a different use case for instant bank transfers – but all three businesses have found value from them.
iwoca, for example, has turned its attention to helping small businesses get paid for the work they’re doing. Businesses often offer customers at least 30 days to pay, and even then invoices are regularly paid late. As Olivia Denyer, iwocaPay’s Product Lead explains: “It puts a massive strain on cash flow, and the relationship between businesses and their customers.”iwocaPay has been built to tackle this problem. It lets payers pay in three instalments, with iwoca paying the supplier in full upfront. But to make this offering as effective as possible, iwoca wanted to offer a payment option that was as easy as paying by card and as secure as a manual bank transfer. Instant bank transfers, powered by open banking, have met these requirements for both iwoca and its customers.
Open banking gives customer-centric businesses an on-brand payment experienceAccording to Josh Queen, Lead Product Manager at Penfold, the pensions industry “has been left relatively unscathed by the customer-centric product revolution that’s happened in the financial services industry in this country in the last 15 or 20 years”. But with Penfold and other challenger brands, things are finally changing. Penfold allows users to set up their account in about 10 minutes. This is a world away from the complicated, paper-based pensions providers that have dominated the industry for so long.
But the drawbacks of incumbent payment methods like manual bank transfers sit awkwardly with Penfold’s ethos of good customer experience. Because card fees are simply too high, the only other option for Penfold until recently has been Direct Debit, which can take up to 5 days to settle, leaving customers frustrated.Instant bank transfers, powered by open banking, give the likes of Penfold a payment option that’s affordable for businesses, straightforward for customers and secure for all parties (thanks to baked-in strong customer authentication).
“Pensions is an area that's massively important for the financial wellbeing of pretty much every person in the UK, often approached with apprehension, and in some cases outright fear because of the traditional experience of setting up accounts.”