Open Banking and the Dating Industry: Perfect Partners!
2021 has seen Open Banking become the go to option for frictionless payment in eCommerce. Set up in 2018 with the objective of improving financial services for customers, Open Banking has brought increased competition and innovation to the financial services sector. Originally a UK initiative from the Competition and Markets Authority ( CMA ), the goal was to find a way of making it easier for fintech companies to work with large banks to create compelling new financial products and services and the idea was quickly adopted by the CMA’s European counterparts. Today, regulated by the FCA, Open Banking Instant Payments has emerged as a seamless and secure payment method to rival credit cards, while significantly reducing cost.
For the online dating industry Open Banking Instant Payments offers users the ability to make payments and initiate subscriptions without the need to manually enter and share credit or debit card details. Transactions are authenticated directly with the bank, leading to a greater than 95% success rate which compares favourably to credit card (typically 70% to 80%). Bank grade security effectively eliminates fraudulent transactions and chargebacks, whilst a frictionless payment process and instant payment directly into the merchant’s bank account round off a compelling business case
Open Banking is therefore set to transform the way that payments will be made in the future, so let’s have a closer look at the benefits you can expect as an online dating provider.
Benefits of Open Banking Instant Payments for online dating providers
Online dating businesses have been harshly dealt with by the credit card industry, who have used a broad brush approach categorising merchants as high risk. This has led to dating businesses suffering low authorisation rates with costly fees and charges. By using Instant Payments, this can be eliminated as payment is made directly to the merchant’s bank account - cutting out intermediaries. Without expensive interchange and card fees, processing costs are up to 80% lower than credit card.
Instant Payments go direct from the user’s to the merchant’s bank account. There is no requirement for the user to enter the transaction amount or beneficiary account details therefore no risk of input error. There is no clearing time and the money will appear into the merchant’s bank account in a seamless transaction which can be easily reconciled.
Bank level authentication of the payment using face or fingerprint verifies the end user, which virtually eliminates fraudulent transactions. There are no chargebacks or fees for failed transactions either which means that overall costs are considerably lower when compared to credit card transactions.
Credit card payments fail for many reasons – fraud checks, spending limits, card expired, user input error. Through Open Banking, payments go directly from the user’s bank account to the merchant’s account leading to success rates of over 95%.
Frictionless checkout flow
Of significant concern to all eCommerce businesses are the new Strong Customer Authentication ( SCA ) requirements as part of PSD2. The implementation of SCA for card payments remains new and unproven. Most examples today show it adds significant friction to the online checkout experience and projections on how this will impact customer conversions are gloomy.
In contrast to cards, SCA has been baked into Open Banking from the outset and retail banks have been instructed by regulators to keep Open Banking SCA flows to be as frictionless as possible. More on this in the next section.
How does GlobalCharge Instant Payments work?
GlobalCharge use an innovative 2 tap checkout flow for Instant Payments, with no requirement to enter financial details – all the customer needs to do is tap to authenticate the payment.
Here’s the process in action:
- Within the dating site the customer chooses the instant bank transfer payment option
Customer is asked to select their bank which triggers the opening of their bank app
- The customer logs into their bank app using their regular authentication method - finger print, face ID or PIN. A summary of the transaction is presented and the customer clicks to initiate the payment
- The transaction takes a few seconds to process and a payment summary is displayed
Note – the above images show a typical user experience on mobile initiated from the merchant’s mobile site or app. Desktop users see a similar but not identical process.
How easy is it for the merchant to set up Open Banking Instant Payments?
GlobalCharge has been at the forefront of payment services since 2007 and has a long track record in the dating industry of innovation and reliability. We’ve made integration a simple and easy process. Any developer with experience of REST APIs and the technical steps required to integrate Stripe, PayPal etc, will find integrating GlobalCharge Instant Payments a familiar process
At GlobalCharge we believe Open Banking is the future for payments removing the complexity and expense of traditional billing solutions, providing a viable alternative to card processing. Our enhanced coverage within the UK and across all the major EU countries enable us to provide the service and support you need as an online dating provider in offering Open Banking Instant Payments to your users.
For more information about Open Banking Instant Payments please contact: