Welcome to our quarterly Industry Insights! With Apple buying into open banking, 2022 is off to an exciting start for the open banking and payments industry! At the end of each quarter, we'll bring you the highlights of what's been going on. Here are the highlights so far:
Open banking adoption accelerates
Open banking marks its four year milestone in the UK with over 4 million users on 13th February. Just days later, the UK surpassed the five million user milestone. Thanks to HMRC’s incorporation of a “Pay by bank” option, which drove a 19.3% increase since December 2021.
Open banking goes beyond Europe
Open banking in the US – Discover Financial Services, in partnership with Buy It Mobility Networks, are planning to give US merchants the option to accept account-to-account payments.
Open banking in Canada – open banking is active in Canada and on the rise. Due to the COVID-19 pandemic, digitsation has accelerated in Canada with increasing numbers of Canadians reporting that they are using less cash and cheques.
Open banking in Australia – The Commonwealth Bank of Australia plans to roll out account-to-account (A2A) payments under the country’s New Payments Platform (NPP), an open access infrastructure for fast payments in Australia.
Apple moves into open banking payments
Apple moves into open banking by acquiring the startup Credit Kudos, a UK open banking start-up. With Apple expanding their services around payments, leveraging open banking opens the way for future opportunities, such as Buy-Now-Pay-Later (BNPL). In addition, in February Apple introduced a Tap to Pay feature that turns the iPhone into a payment terminal.
Big savings for online retailers in the UK with open banking
A report by Yolt shows that open banking could save the average SME online retailers over £19,000 a month in transaction fees, associated with credit cards by increasing the use of open banking technology. In addition to the costs saved through transaction fees, open banking can also help SME online retail businesses reduce incidents of fraud, where SME’s lose an average of £4,257 a year.
8/10 card payments in Nordic countries are now contactless
With Denmark taking the lead, followed by Norway, Finland and Sweden, the Nordic region is proving to be among the leaders in digital payments with 8 out of 10 card payments being contactless.
Warren Buffett dumps Visa and Mastercard stocks… and invests in a fintech
Warren Buffett invests $1 billion in a bitcoin-friendly neobank, Nubank, the largest fintech bank in Brazil. Although Buffett is known to not invest in Bitcoin directly, he continues to increase his portfolio in the cryptocurrency and fintech sectors.
How merchants can increase conversion rates
Following the implementation of Secure Customer Authentication (SCA), merchants have experienced an increase in false declines. Merchants must explore alternative payment methods, such as account-to-account payments (A2A) and Buy-Now-Pay-Later (BNPL), and focus on a great customer experience in order to stay competitive in 2022.
Visa and Mastercard set up to raise credit card fees
Even after Amazon announced that they were considering to block Visa credit card payments on its UK store (the threat has now been dropped), Visa and Mastercard are planning to raise credit card fees from April 2022, on online purchases made with credit cards
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