Research by TrueLayer and YouGov reveals merchants are set to embrace open banking.
Image source: Photo by Andrea Piacquadio from Pexels
Nearly three-quarters (74 per cent) of merchants plan on adopting open banking payments to reduce their cost, according to new research.
Open banking payments have long been heralded as a rival to the standard card payment rails of Visa and Mastercard. But, the report confirmed, for many card payment costs are merchants’ biggest pain point with their existing provider.
Almost half of the merchants surveyed (49 per cent) rated the high cost of payments in their top two pain points with existing payment providers. Almost a third (31 per cent) said it was their biggest pain point.
The data, which comes from a report from open banking provider TrueLayer and YouGov, also found nearly two-thirds (63 per cent) of shoppers are comfortable using open banking payments. The research found shoppers aged 24-34 are most comfortable paying by instant bank transfer (77 per cent), followed by those aged 35-44 (74 per cent).
Credit and debit cards still dominate at 50 per cent, however, rising to 63 per cent for purchases over £200.
Digital wallets – such as Google Pay, PayPal and Apple Pay – are also very popular, with 38 per cent using them as the primary payment method.
“Debit and credit cards are falling short because they weren’t designed for digital commerce at scale. Traditional bank transfers are also flawed, taking shoppers away from the checkout and forcing them to manually copy over transaction details,” said Ossama Soliman, Chief Product Officer at TrueLayer.
“The result is poor shopper experience, low conversion and billions in potential revenue lost.”
The full research report can be downloaded here.