Banking: End of Card Payments:
Any new technology or innovation always opens the debate about the relevance of such models. With regards to open bank APIs (application programming interfaces), FinTech’s latest offering, discussions are ongoing on how this can lead to a revolutionary banking experience for the benefit of end-users.
The idea behind all these innovations continues to be to provide a better customer experience and take advantage of the choice of integrated systems available today.
However, one of the most interesting issues around the Open Banking model is the potential to completely change the payments ecosystem.
How does Open Banking work?
Choose one of the many programs to help you get the most out of your business and manage your finances efficiently,
• Open Banking enables companies to provide accurate, confidential, and more personalized financial guidance tailored to specific circumstances.
• To give personalized advice, companies need to know how to use their account. At this time, you must provide your confidential banking information to personal comparison sites for personal financial advice.
• Open Banking will use application programming interfaces (APIs) to securely share customer information.
• Businesses can use the Open Bank API to view transaction information and tell you what to keep if you find the account that works best for you. Or, if you’re a small business, you can find the best deals on invoices and commercial loans.
No concessions, no interruptions, just direct service, pure and simple.
Open banking: coming to an end soon?
This is definitely a possibility!
In fact, Open Banking is a concept that deals with the free flow of data. It allows third-party service providers to obtain (with your permission) protected financial information in a timely manner.
A good example of this is the bank payment mechanism, where all transactions must be done manually with debit cards. On an Open Banking platform, however, the API/app can download consumers’ transaction data directly from their accounts to process payments, enabling cardless transactions.
While the concept is still in its infancy and will take some time to form, it will allow third-party organizations to initiate payments between customer bank accounts.
What will likely happen, therefore:
• Banks will no longer process card transactions/payments.
• An authorized third-party organization may make payments on behalf of its customers.
• Customers do not need to shop in stores with a physical card. They can easily pay for digital wallets on their smartphones or smartwatches using emerging technologies like Samsung Pay, Apple Pay, etc.
Can open banking change the entire payment system?
To understand this important shift to open cardless payments, led by Open Banking, it is important to first explain how payment cards work.
The payment card is essentially a signal supported by a unique PIN or customer signature as authentication, which helps to identify the payer and the processing source for each payment.
Tap on Open Banking in the image!
Open Banking replaces the payment card with the customer’s correct bank details, no confirmation is required. By ensuring a robust authentication system (such as phone authentication), the model can easily be used to process transactions instantly.
There are several benefits associated with greeting cards and using the Open Banking API to process payments.
Benefits of Using the Open Bank API for Card Transactions
This is probably one of the big benefits of using the Open Banking API to process payments instead of cards. The open bank model is of such a nature that it does not require a physical signal, resulting in cost savings for card operators and reduced infrastructure costs for debt managers.
B. Easy to set up
The convenient configuration of the Open Banking products compared to the card payment method is another reason that strengthens the possibilities of this phenomenal step.
Open banking services are designed to offer payment transfer solutions such as easily linking credit cards or using bank details for end users.