European entities embrace open banking payments but see room to improve infrastructure

MADRID, 3 Jun. (EUROPA PRESS) -

European financial institutions are already adopting open banking or 'open banking' payments, but they recognize that there is still a long way to go in spreading this method and improving infrastructure.

This is reflected in a new study prepared by Tink, the 'open banking' platform acquired by Visa, which has conducted surveys of 380 financial services managers from 12 countries.

The study shows that three-quarters of European financial institution managers (74%) identify increased payment security and fraud mitigation as key benefits of open banking payments for merchants.

Other important advantages are the ability to make instant transfers (70%) and the possibility of reducing costs for merchants (67%).

The survey also reveals the specific use cases that executives consider most suitable for payment initiation 'open banking' services, paying special attention to those processes that are often "frustrating and lengthy" for the user. Thus, they point to transfers between users, payments of bills and receipts, transfers of funds for investments and savings, and online commerce payments as the most suitable use cases for payment initiation services.

On the other hand, the study shows that there is still work to be done to ensure that payments through open banking reach their full potential. According to 75% of those surveyed, there are important barriers that they overcome for the massive adoption of payments through 'open banking', the most important being the limited knowledge of users and the scarce use of instant payment channels throughout Europe to allow payments in real time.

The head of payments and platforms for southern Europe at Tink, Carlos Rey, has highlighted that 'open banking' "has the potential to transform the payment sector". “In some markets we are already reaching a tipping point in user adoption, where financial institutions are seizing the opportunity and investing in a number of use cases. As a result, payment initiation service volumes are rising. growing rapidly," he said.

Regarding the barriers that prevent mass adoption by the market, Tink has welcomed the European Commission's proposal to impose the adoption of instant payment channels and has demanded that they guarantee that access to these channels is free for consumers. . "This move will ensure we have the necessary infrastructure to continue to innovate, while encouraging consumer adoption of open banking payments," he explained.

Tink's study also shows the need to establish a solid foundation of consumer trust and awareness to enable payment initiation services to reach their full potential. "As an industry, we need to work together to create a common language that allows consumers to easily understand the service and its benefits," said Rey.

In this regard, the firm points out that fintechs have a "vital" role to play in helping financial institutions improve the user experience, be pioneers in the application of new use cases and establish business models that allow all stakeholders to generate value from payment initiation services.

"Forging strategic alliances with fintechs can help financial institutions innovate around APIs to reduce friction and improve the end-user experience. This is essential to drive mass adoption of 'open banking' payments by consumers. consumers in the coming years," said the Tink manager.