The complete Open Banking provider checklist

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Nov 23, 2021 · 7 minutes

You’ve decided you want to start taking account-to-account payments using Open Banking so you can offer your customers a more seamless and secure way to pay online. What’s next?

With a number of Open Banking providers in the market, it’s important to pick the right one to ensure you’re partnering with a winner. We’ve put together a checklist of questions you can ask your provider to make sure you’re getting exactly what you need.

Payment functionality: what functionality does the solution offer?

1. How do you ensure I always receive my funds?

When your customers pay through Open Banking, every payment will be set up by your provider. Open Banking only manages the connection to the bank, so make sure you find out how your provider handles the rest of the flow of funds, including the confirmation of deposits into your bank account as not all providers guarantee this.

Receiving funds is only half the challenge, it’s also important to understand how your deposits will appear. If you have to reconcile hundreds of individual payments in your account it will be a time consuming task. To make sure you’re not having to spend unnecessary time reconciling payments, look for a provider that supports consolidated sweeping as a single daily transfer, to prevent having to reconcile hundreds of pay-ins and payouts every day.

2. How do you handle refunds?

To create a great end-to-end customer experience, it’s essential to consider how you will manage refunds when using an Open Banking solution. This is particularly important as Open Banking doesn’t support refunds out-the-box, so it requires your payment provider to have a custom built solution.

Depending on the provider, your refunds may be handled manually by collecting bank account details from your customers, however this can result in slow refunds and a sub-par customer experience.

Ideally, you want an Open Banking provider that offers an integrated and streamlined solution that is built into the payment process, and allows for multiple refunds to be requested easily through an API or automated process.

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Coverage: what bank coverage do you have?

3. What is your coverage breakdown across connections and countries?

Providers will often speak about the number of connections they have to banks, whilst this may seem straightforward, there is some complexity in what bank connection actually means.

You’ll often find differences in coverage claims quoted by number of banks and number of connections. Most banks offer more than one connection; one to personal banking and one to business banking for example. In many cases, banks in Europe offer multiple connections based on the features and speed of account-to-account transfer needed.

The best way to ensure you get the right coverage is to check which banks your customers use to pay - you can ask your issuing bank for this information. Then ask your provider if they cover these same banks. You can always request to see market coverage in key markets to check the customer journey for your most important banks.

4. What type of connection do you offer?

There are different types of connection available and each one will offer a different level of service, so it’s important to understand what type of connection you are going to receive – it can be the difference between receiving funds in 10 seconds or 3 days.

When a provider quotes their coverage in Europe, ask for a breakdown of the types of connection (also known as payment schemes or “rails”). For example, Open Banking EUR payments can be made through SEPA Credit Transfer or SEPA Instant Credit Transfer schemes.

The type of scheme used can have a big impact on the experience and cost, both to you and your customers. Once you have a breakdown, you’ll know whether the provider is offering the types of schemes you need, to make sure you can accept the payment methods that fit your business model.

To support an increasingly global market, Vyne provides a pan-European offering with coverage through the SEPA Credit Transfer scheme. Not only that, but for real-time payment applications we also deliver instant payments across Europe's biggest e-commerce markets with Faster Payments Service and SEPA Instant Credit Transfer connections in the UK, Germany, Italy, France, Spain, and more. Whatever your application and market, you’ll be able to ensure Open Banking works for you.

User experience: how does the user experience optimise conversion?

5. How do customers pay on desktop?

Your checkout experience is integral to drive conversions, so you will want to ensure you’re providing an optimal experience across both mobile and desktop and any transition between the two should be smooth and automatic.

Questions to ask:

  1. Does the user have to complete the journey on mobile if they start on desktop?

  2. What happens if the user doesn’t have their bank app installed?

It’s important to remember that most users will be new to Open Banking payments, and therefore both your desktop and mobile journeys should be intuitive and seamless in order to minimise drop-off rates.

There’s no better way to understand the payment experience than trying it yourself. Don’t be afraid to ask your provider for a demo you can try out. Try out a Vyne payment for a good cause to understand how the experience works yourself.

6. What features do you use to optimise the payment experience?

On average, consumers spend 30 seconds trying to understand a new product or website before they navigate away. With more payment options than ever before, it’s important that you pick a provider who understands what makes an inviting and well-converting payment flow.

Many consumers are new to Open Banking payments, so it’s paramount that the payment flow is simple, easy to understand, and unambiguous. Aim to select a provider with a clear and well-designed user interface. Look out for how the flow deals with selecting a bank, capturing consent, and handling users who need guidance through the payment journey.

With new challenger banks and payment options appearing every month, consumers can easily get lost in the sea of banking options. Having a search function will make it easier for your customers to find their bank.

Here’s an example of the Vyne workflow. We have opted for a dynamic list of the most popular 12 banking options, whilst allowing consumers to search for their bank, to avoid slowing down the payment process and risking drop-off.

7. Which checkout options do you offer?

As you further embed Open Banking payments into your application, it may be worth considering how you can customise the flow with your own name and logo, colour scheme, and design.

There are two types of checkout options, hosted and integrated. Using a hosted checkout page, you can use the payment provider's own checkout workflow. If you’re looking for a solution where you can customise the entire experience you will want an integrated checkout.

Technical: have you accounted for the intricacies of the PSD2 ecosystem?

8. Do you offer real-time notifications?

Many banks do not offer a real-time push of payment data. This means that providers need to continuously poll their payments in order to find out what state they’re currently in. To enable real-time applications with a smooth payment flow, it’s important you select a provider who is able to offer instant notifications.

9. What redundancy plan do you have in place in case of an outage?

Since PSD2 and Open Banking is still a generally new initiative, it’s important to make sure your Open Banking provider has a plan in place in case of an outage to ensure it won’t impact your customers negatively.

You should look for a provider that sources connections from multiple partners in order to provide redundancy against any single provider experiencing downtime. Occasionally, banks may experience an outage which could affect one or all providers. When this happens, providers with multiple connection partners are able to switch the provider, or temporarily disable a connection to prevent a bad user experience which could damage confidence in your application.

10. How do you handle the different authentication flows for PIS payments in Europe?

Across Europe, the payment process can behave differently depending on the country and connections. For example, some Italian banks require a username to be provided during the payment process. At some German banks, the mobile banking app issues a security code which needs to be input before the payment can be approved.

The good news is, consumers use these processes often and will be familiar with the differences specific to their market. However, knowledge of these differences is important and you should make sure you’re fully up-to-speed on how your payment flow works across each of your target markets.

Your provider should be happy to answer any questions you have, and be as honest and transparent as possible. At Vyne, we’ll be happy to walk you through each step of the customer journey, and find the right fit for Open Banking in your application.

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Written by

William Hand - Product Manager

Click to connect with Will

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