If you’re not already taking advantage of open banking, it’s time to start. Anyone looking to grow and scale their business can benefit from open banking. It’s not only for large organisations with seemingly unlimited budgets - it’s open for use to businesses of all sizes and types.
A quick reminder - what is open banking?
For anyone new to the topic, let’s give a quick refresher. Open banking refers to banks sharing data with regulated third-party providers. This data can only be shared with customer consent, which can be revoked at any time. The information is shared via APIs, or secure application programming interfaces. With open banking, these third parties can use customer consent to complete purchase transactions between the customer’s bank account and the business bank account.
The overall goal of open banking is to improve the range of customer financial services. And the benefits to businesses are numerous.
How open banking can help scale your business
There are several ways in which open banking can be used to your advantage. Listed below is a discussion of the most important ones that can affect your business.
1. Expanding your potential market
Want to cross borders and sell not only in-country, but internationally? Open banking works globally, meaning there are no limits on geography. Availability to a wider audience means more sales for a business, which in turn leads to greater revenue.
Expansion is particularly important to smaller businesses. Finances are tight in any smaller enterprise. Saving money and having exposure to more potential customers is of utmost importance for a business to scale. Many make the mistake of offering a payment method that only works for local customers. Though local is the clear choice to begin selling products or services, the opportunity to go global is always there. If your focus is only on the local market, you may remain a small business forever.
kevin. offers a payment gateway that covers a well-developed bank network. This includes 27 EU/EEA countries, so you can reach more than 350 million clients around Europe
2. Offering the payment methods customers want
According to Baymard Institute, 12% of abandoned carts occur because the desired payment option isn’t offered. When the customer gets to the checkout process, it’s essential to offer them an array of methods that will suit their preferences. Otherwise, they will abandon the cart, and the business will lose a sale.
Open banking-powered account-to-account payments can be one of many options offered to customers to ensure they’re satisfied with the methods they can use to complete the transaction. When new payment methods enter the market that are faster and more convenient for customers, such as is the case with open banking, being open to adopting them will help scale your business.
3. Providing a high degree of security
Many merchants experience problems with chargebacks or other types of fraud. Open banking gives a high degree of security, so you can scale your business without worries of fraudulent transactions.
One of the benefits of choosing to work with kevin. is that you get this security at a fair price.
To find out more about the security of open banking, check out our blog post, "Is open banking safe?".
4. Improving your business’s cash flow
When a customer pays by credit card, you may not receive the funds for days or even weeks. The wait for the money to travel from the customer account to your business bank account means you don’t get the money despite the order having gone through, and perhaps even the customer receiving the goods.
When you use open banking, you benefit from account-to-account payments. This form of payment uses instant payment rails, so funds travel quickly. Even when the payment crosses borders, transfers are instantly validated. That means you can fulfil orders quickly - and get paid directly, no delays due to intermediaries in the payment process.
5. Eliminating the need for multiple legacy systems
If you establish a business across several countries, you likely need to acquire multiple legacy payment systems to suit each country. Since these legacy systems can differ by region or country, it can be costly and difficult to procure, service and track each system.
There is no ability to share processes or economies of scale if you’re using different payment systems in each country. Open banking simplifies this entire process, blurring the lines across borders and saving a business time, money and frustration. That means more money to put back into your business where you need it most.
6. Offering a consistent user experience
One issue merchants run into with payment methods is that it can compromise the user experience. kevin. offers a white-label solution, which means when the payment methods are presented to the customer, the brand experience is consistent. The checkout process will be completely aligned with your brand identity, no matter the country or language.
Cross-border B2C e-commerce is projected to generate over 4195 billion USD globally by 2027. It’s an opportunity no business can afford to lose out on.
The advances that make open banking possible are helping to drive a single, digital market in all of Europe. That means the ability to standardise processes in your business and take advantage of one solution that can be used across all countries the business operates in, without having to worry about the complications of multiple legacy payment systems.