The Future of Payments is Open
Open banking has generated plenty of hype and headlines over the last four years. To speak of its industry-changing potential can sometimes feel like a truism, even a cliché. That is why Tink does an annual survey of senior executives in financial services on their attitudes to open banking. Their research helps us understand the momentum, what the challenges are, and what we need to do as an industry to overcome them.
Today, it looks inevitable that the payment industry is on the verge of a big bang caused by open banking. Tink's 2022 report which surveyed almost 400 finance leaders across Europe, provides some evidence of the first stirrings.
Headline findings include1:
• Over the last few years, the attitudes by financial executives towards open banking services had improved significantly, with 55% of executives being positive in 2019 to 71% in 2021.
• Payment initiation services was ranked the most important investment area as an open banking use case, with 72.1% of financial executives agreeing.
• All executives indicated that their business has either already invested in open banking (75%) or plans to in the next 12 months.
The research shows that there is an expectation for open banking payments, and specifically payment initiation services, to provide merchants with more secure payments than existing methods while enabling instant transactions at lower costs and with embedded experiences. Financial executives are looking to open banking to provide low-cost, frictionless payment experiences.
However, those same financial executives also report that there is work to be done on the industry side. For open banking payments to flourish we need increased adoption of instant payment rails, to increase user awareness and improve the user experience.
Read more in the Tink 2022 open banking survey report, “The future of payments is open”, which is available for free on the Tink website: here.
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1- Tink, The future of payments is open, 2022: https://tink.com/blog/open-banking/report-future-of-payments-open/
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