Author: Alice Anghelea
How Open Banking simplifies PO payments in online stores for consumers and merchants alike
Currently offered by most merchants, payment by Payment Order is a method consumers prefer in online stores when the value of the shopping basket is significant or consumers are reluctant to expose their bank card over the Internet.
Although it involves significant steps for the customers of online stores, they prefer it because it gives them online security and saves them from paying cash on delivery.
Open banking automates the initiation of PO payments for consumers and their receipt for merchants. The online payment experience becomes simple and fast by automatically completing the payment order and automatically confirming proof of payment, and even receipt, directly in the merchant's ERP system.
The simplicity of open banking wins over the complexity of the OP when initiating online payments
While PO is a payment method with no direct cost to merchants - taking place between the consumer's account and the merchant's account, without the intervention of payment processors, as is the case with online card payments - paying through OP is expensive through the steps, the effort and attention required, but also the experiences offered by both sides of the transaction.
On the one hand, the consumer's payment experience is long and demanding; he goes through all the steps of a new payment in Internet banking for each purchase paid through OP:
from logging into the Internet banking platform, ordering payment by manually entering the order's payment details and merchant identification data - which must be correct,
until the payment is authorized, followed by downloading the proof of payment from Internet banking and sending it to the merchant to notify them that the payment has been made.
On the other hand, the merchant must take care:
to verify the receipt of the proof of payment by email and to remain on hold with the preparation of the order until the receipt is confirmed;
to periodically check the status of his account in Internet Banking until he sees the payment;
then request the operational team to prepare and deliver the order.
Open Banking provides a fully automated superior payment experience to OP and simplifies the consumer payment experience and merchant receipts management:
Easier for consumers
The payment still takes place directly, account to account, between the consumer's and the merchant's accounts;
It offers the highest level of payment security compared to any other online payment method: consumers never expose confidential data to third-party processors and eliminate the risk of fraud;
Shorten the payment experience: the payment is initiated right from the electronic proforma invoice, the payment and merchant details are pre-filled automatically, and the consumer is directed to the platform of the preferred bank, where they authenticate and authorize the payment.
Easier for merchants
Merchants reduce their administration to a few fully automated steps with open banking:
They send the proforma invoice to their customers;
They automatically receive the payment status directly in their ERP once the payment is made;
I can view the receipt of the invoice in ERP and also automatically.
Paying through open banking revitalizes both the shopper experience at online payment without a card and that of merchants.
Buyers who choose to pay through open banking come from those who prefer the classic OP today and those who pay with a card when it is not at hand to quickly and safely complete an online purchase.
In Romania, open banking payments are possible with SmartPay - the first solution developed locally and authorized by the BNR. Together with Smart Accounts, which enables the aggregation of bank accounts and the facilitation of quick reconciliations in the merchant ERP, it provides complete automation from payment initiation to confirmation of receipts.
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