Say goodbye to card fees: How open banking is changing the game for businesses

Card payments have dominated online transactions for years, but they come at a cost. With their interchange fees, chargebacks, and processing delays, traditional card transactions often chip away at a merchant’s profit. But what if there’s a way around this? Thanks to open banking, businesses finally have a viable alternative that offers speed, security, and, most importantly, cost efficiency.

The cost of card payments for a business

Credit and debit card transactions typically involve multiple intermediaries: the issuing bank, the acquiring bank, card networks, and payment processors. Each party takes a cut. On average, merchants can lose 1.5% to 3.5% of every transaction to fees. This adds up fast for businesses operating at scale or with tight margins.Plus, with cards, the cost is not just about fees – card payments can take days to settle, are vulnerable to fraud, and often come with high chargeback risks. It’s no surprise that many merchants are actively looking for alternatives.

Open banking – the game changer

Open banking technology allows third-party providers to access banking data and initiate payments directly from consumers’ bank accounts, with their consent. It removes card networks from the equation, enabling account-to-account (A2A) payments that are real-time, secure, and low-cost.For merchants, this means: 

1. Major cost savings

With open banking, there are no interchange or card scheme fees and fewer intermediaries. This can significantly lower transaction costs, making a huge difference, especially for small businesses.

2. Faster funds flow

Pay by Bank streamlines the entire payment process by cutting out card networks and unnecessary intermediaries. Funds move more directly between the customer’s bank and your business, reducing delays and helping you maintain a better cash flow.

3. Stronger security 

Open banking transactions are authenticated using strong customer authentication (SCA) and processed via the consumer’s banking platform. Since the payer authorises the transaction in real time, this drastically lowers fraud risk and virtually eliminates chargebacks.

4. Streamlined checkout experience 

Customers no longer need to enter long card numbers or worry about expiry dates. With open banking, they simply select their bank, approve the payment via mobile or desktop, and are done in seconds.

What’s in it for payers? 

While businesses reap the financial and operational benefits, payers aren’t left out – far from it. Open banking is directly addressing three primary triggers that ruin the payment experience and lead to cart abandonment:

• Fraud risks – One of the payers' most significant concerns is getting scammed. With open banking, this risk is practically eliminated. Customers authorise transactions directly through their banks, usually using biometric login or two-factor authentication. 
• Frustrating checkout – Everyone hates filling out payment details and additional information needed for secure authorisation. With open banking, there is no need for any of that. Payers are redirected to their banking platform for payment approval in a couple of clicks. 
• Additional fees – No one likes to pay extra for payment processing or international transactions. Open banking removes all the intermediaries, together with their additional commissions.

All things considered, open banking is by far the most payer-friendly payment method available today. It’s built to remove unnecessary friction, eliminate common pain points, and provide a fast, secure, and intuitive payment method. Instead of adapting to outdated systems, customers finally get a solution designed around their needs, making the entire checkout experience feel effortless.

Open banking, done right with Payop

You may think all of this sounds great, but it's probably difficult to implement, so it’s better to stick with good old cards. Fortunately, you’re wrong. With Payop – trading name of Transferop Payment Gateway – it’s easy to access the full potential of open banking. Payop’s Pay by Bank solution is designed to give businesses all the benefits of open banking without the complexity. No need for technical headaches or building custom integrations from scratch. The heavy lifting is already done, so that you can enjoy:

• Lower transaction fees by removing card networks and intermediaries
• Faster processing, as transactions aren’t delayed due to fraud checks
• Increased payment security and reduced fraud risk through bank-level authentication
• Smooth checkout flows that your customers will actually enjoy

Whether you're running an online store, a digital marketplace, or a high-volume service business, Payop’s Pay by Bank is a plug-and-play solution that helps you modernise your payments without disrupting your operations.Open banking doesn’t have to be complicated. With Payop, it just works.

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