UK businesses and consumers express desire for more equitable, secure payment methods, according to Yapily's disclosure.
In a recent discussion with Allica Bank, Yapily, an Open Banking infrastructure provider, highlighted the potential of Open Banking to help UK Small and Medium Enterprises (SMEs) scale. According to Nicole Green, Vice President of Product Strategy, Innovation, and Policy at Yapily, businesses require lower costs and improved security, which Open Banking offers.
To validate this claim, Yapily conducted a survey involving over 2,000 UK consumers and 250 merchants. The survey revealed that 40% of merchants would be open to offering Open Banking, which comes with low fees and high security as standard. However, over half (54%) of merchants flagged the risk of data breaches as a key concern. Nearly all of those surveyed (98%) cited low fees as being an important factor when choosing a new payment method.
In response to these findings, Yapily has proposed several key strategies to create a more secure and cost-effective Open Banking ecosystem while addressing merchant and consumer concerns. These strategies include:
1. Enhanced Security Through Real-Time Data and Fraud Prevention: Leveraging Open Banking APIs that enable real-time access to transactional data powers immediate fraud detection and prevention. This continuous monitoring helps identify suspicious activities early, reducing fraud risk and protecting both merchants and consumers.
2. Fairer, More Transparent Payment Methods: Building payment solutions that reduce costs associated with traditional card payments and chargebacks, offering a more direct and transparent way to handle transactions, is crucial.
3. Improved Consumer Protection via Verified Identity and Compliance Tools: Utilizing APIs that support Know Your Customer (KYC) and Know Your Business (KYB) verification helps reduce risks linked to fraudulent merchants or consumers.
4. Multi-Factor Authentication and Secure Account Access: To secure merchant platforms, implementing multi-factor authentication and strict credential management practices is essential.
5. Building Ecosystem Resilience by Managing Third-Party Dependencies: Transparent communication about potential downtimes and designing systems that can gracefully handle outages without compromising security or service reliability is crucial.
Green also emphasized the need to find the tipping point that drives consumer behavioural change and encourages them to make the switch to Open Banking at the checkout. She highlighted the importance of rolling out new features like cVRP faster and creating a clear, trusted brand complete with an industry trustmark for Open Banking payments.
Yapily is inviting everyone in the Open Banking and payments ecosystem to work together and develop a model that's widely used, builds trust, and makes payments safer and better for everyone. The recommendations include gaining alignment on Open Banking's core value propositions, creating a consumer protection model without chargebacks, developing a strong Open Banking brand, and introducing an Open Banking trustmark.
By addressing these concerns and implementing these strategies, Yapily aims to drive adoption of Open Banking, making it a safer and more efficient payment method for businesses and consumers alike.
[1] Sift API: https://sift.com/ [2] AMLYZE: https://amlyze.com/ [3] cVRP: https://www.cvrp.org/ [4] Open Banking Trustmark: https://www.openbanking.org.uk/open-banking-trustmark/
- The potential of Open Banking to assist UK Small and Medium Enterprises (SMEs) in scaling is being explored, with a focus on lower costs and improved security.
- A survey conducted by Yapily revealed that 40% of merchants are open to adopting Open Banking, ushering in low fees and high security as standard, but 54% of merchants are concerned about the risk of data breaches.
- To alleviate these concerns, Yapily has proposed strategies like enhancing security through real-time data and fraud prevention, building fairer, more transparent payment methods, improving consumer protection via verified identity and compliance tools, implementing multi-factor authentication, and managing third-party dependencies for a more secure and cost-effective Open Banking ecosystem.
- Nicole Green, Vice President of Product Strategy, Innovation, and Policy at Yapily, emphasized the need to find the tipping point that encourages consumer behavioral change, urging the adoption of new features like cVRP and creating a clear, trusted brand complete with an industry trustmark for Open Banking payments.
- Yapily is calling for collaboration within the Open Banking and payments ecosystem to develop a model that's widely used, builds trust, and makes payments safer and better for everyone, suggesting alignment on Open Banking's core value propositions, creating a consumer protection model without chargebacks, developing a strong Open Banking brand, and introducing an Open Banking trustmark.
