the ideal means of payment

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With the advent of new online payment methods, merchants now have everything they need to offer their customers a simple, direct and secure payment experience.

To comment on this forum and discuss live with the Bridge teams about the new payment methods, come and meet them at the Tech for Retail show on November 28 and 29 in Paris.

With the advent of new online payment methods, such as Open Banking transfers, merchants now have everything they need to offer their customers a simple, instant and secure payment experience.

Traditional means of payment on the rise

Bank card, traditional transfer, direct debit… Are the payment methods preferred by companies about to be replaced? One thing is for sure, their current limitations are real obstacles to ecommerce site conversion.

Take the credit card for example. In addition to its limited lifespan, the time it takes to enter the information and the inherent risk of chargebacks or fraud, this means of payment entails very high costs for the e-merchant due to the accumulation of interchange fees charged by the issuer. be levied. bank, fees charged by the networks (Visa, CB, Mastercard, etc.) and fees for the payment solution used. But that is not everything. The credit card has another critical weakness: the ceiling!

However, a payment with a bank card that is declined due to an insufficient ceiling inevitably causes great frustration for the buyer, who will probably abandon his shopping cart at the worst possible moment. Supporting figures: 75% of baskets abandoned, of which 58% during the payment phase. Could salvation then come from traditional transfers, or even direct debits?

Not really. The experience of payment via bank transfer remains quite cumbersome for the buyer. He has to manually add your IBAN and your BIC, wait up to 48 hours until you are recognized by the bank as a trusted beneficiary, and then start the transfer by possibly adding a precise reference… So many time-consuming actions and source errors that, moreover, cannot end upon execution of the transfer; reconciliation work required a posteriori to reconcile your invoice with the transaction made.

As for direct debit, the payment experience is hardly more flattering to the buyer and poses a real risk to the e-merchant; any direct debit that can be disputed by the buyer within 8 weeks. An eternity. It is no coincidence that, in response to the shortcomings of traditional payment methods, the payment industry today competes in ingenuity to offer new innovative solutions. Electronic wallets, digital payment platforms (Apple Pay, Google Pay, Samsung Pay) and other BNPL solutions are multiplying with new specific value propositions for the buyer.

Unfortunately, this plethora of payment methods does not necessarily equate to a better user experience, but on the other hand it poses new challenges for merchants, particularly in terms of integration and maintenance.

The instant transfer, the e-merchant’s lethal weapon

Whether direct transfer or direct payment from account to account, the Open Banking transfer is a SEPA transaction that takes less than 10 seconds. Accessible on the French market since 2018, instant credit transfers are benefiting from a sharply rising penetration rate, to such an extent that the European Central Bank predicts that it could already represent almost one in four payments by 2025!

How to explain such success? On the buyer’s side, the instantaneous transfer is a continuation of the traditional transfer. It therefore enjoys a high level of trust compared to other innovative payment methods. But while similar to the good old bank transfer, this new generation of transfer still presents some radical innovations that are at the root of its success.

Almost instantly, regardless of the day and time of the week with registered banking institutions and achievable in a few clicks (without adding a beneficiary and without even leaving the site or the e-commerce application), the Open Banking transfer ensure that the payment experience enters a new dimension. This eliminates the tedious tasks of the buyer thanks to pre-filled transfer orders, instant bank authentication and automatic reconciliation; enough to make the buyer smile and increase your conversion rates.

Although the smooth payment experience is characteristic of the direct transfer, the latter also distinguishes itself from traditional payment methods due to its high level of security, great flexibility and low costs. Indeed, unlike the bank card, the direct transfer does not expose you to the risk of chargebacks and reduces the risk of fraud by up to 100 times.

For use cases where customer baskets can be high, Open Banking’s high payment limits and lack of an expiration date also make it an ideal payment method. Indeed, the key lies more in the adoption of integrated payment systems that are able to overcome the obstacles traditional payment methods face.

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