ne significant development which has fuelled growth is HMRC’s incorporation of a ‘Pay by bank’ option into the self-assessment process. This can be seen as a seal of approval by the tax authority, and one which helped propel the total number of Open Banking payments in January 2022 to an eye-opening 3.86million. Fast, secure and with no cards and no data entry, they’re the future. This year, I’d like to see the industry shift from conversations about ‘use cases’ toward talking about Open Banking payments as simply a way to pay. Hopefully, the way to pay, which will start to erode the dominant market share of cards and mainstream wallets. On the right trajectory Having worked in the payments industry for two decades, I’ve seen many different payment methods rise and fall. But they generally all follow the same trajectory. There are the early adopters, always hungry to find new ways for customers to pay. It’s the iGaming, FX and – most recently – crypto verticals. If you consider the original shape of PSD2 – single, immediate payments – it’s only logical that loading a wallet or account were an obvious fit. After a new payment method conquers these early pioneers, they migrate to traditional e-commerce. And, because refund capabilities are beginning to become available through regulation and innovation, that’s where Open Banking payments are headed next. We’re seeing major payment gateways being asked by their customers for Open Banking payments. This is when we’ll start to see the big boom: accountto-account (A2A) payments on hundreds of thousands of e-commerce websites across the UK and Europe. Then what’s next? Customer present, that’s what! QR codes for payments, instore payments, links generated by customer service staff and sent to the customer’s mobile, and - of course - NFC (near field communication) payments. QR codes are particularly interesting. Who would have thought this would be a likely way to pay in the UK and Europe a few years ago, but the attitude has now changed due to the pandemic. Many restaurants, for example, now prefer you to peruse a digital menu accessed via a QR code. Using WeChat and Alipay’s success in China as a yardstick, there’s definitely potential for merchants to use QR codes on terminals or tablets to accept Open Banking payments. Lining up for the final strike When it comes to e-commerce, it’s the e-tailers that really have the power to propel Open Banking payments into the mainstream. “When it comes to e-commerce, it’s the e-tailers that really have the power to propel Open Banking payments into the mainstream. There are household names like Amazon, but each country also has its stars – think Tesco, Argos and Sainsburys in the UK.” Bank i ng & F i nanc i a l Se r v i ce s 38 Finance Monthly.
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