Payop, an international payment processor and a payment aggregator, has partnered with Tink, a market-leading payment services and data enrichment platform, enabling it to add ‘Pay by Bank’ to its checkout options.

Payop is now live with the Tink Pay by Bank solution for merchant checkouts, which has already enjoyed noteworthy growth. The amount of executed payments more than doubled between January and December 2023.

Anastasiia Semenkova, CEO at Payop, explained the decision to implement the open banking solution: “When we decided to test open banking technology for e-commerce payments, our choice fell on Tink. We considered many providers but were impressed by Tink’s product offering and consumer-centric approach.

“Going into this, we were already positive about the future partnership, but in practice, it turned out to be much more than we expected. Tink showed us the potential of an open banking technology, providing secure payments that can be done in three clicks.”

Payop works with a variety of merchants from small e-commerce stores to large enterprises, offering a unique checkout solution with numerous payment solutions.

Payop and Tink hope to promote and grow the adoption of this payment method across Europe through this collaboration. Pay by Bank is available for Payop merchants across Europe including France, Germany, Netherlands, Spain and the UK.

Semenkova added: “The European market is very competitive. There are many payment options available in each country. But once consumers try Pay by Bank, we find that they don’t go back to other methods. The increase in adoption of Pay by Bank that we are seeing at Payop would be impossible without a stable and reliable partner. For us, it’s Tink. Tink maintains a high-quality API and keeps adding new banks and countries to its coverage.”

Pay by Bank

Pay by Bank is an online payment method that lets consumers purchase goods and services by initiating payments directly from their bank account to the seller’s account.

This account-to-account payment method provides a secure and streamlined experience, at a low cost, enabling merchants to differentiate themselves from the competition.

Ian Morrin, head of payments and platforms at Tink, also added: “We’ve already seen impressive volume growth in our collaboration with Payop, and we are proud to support them in their Pay by Bank solution. Pay by Bank complements the current payments ecosystem.

“It’s not just about creating another choice of payment at checkout, but offering consumers a payment method that has everything they may want and have come to expect – familiarity, speed, reliability and convenience.”

Access to finance and access to credit are quickly becoming some of the biggest topics in the world of finance. Particularly across the UK, people from all situations and backgrounds have revealed that it is much harder to access credit products or get loans approved. 

Now, new research from Tink, the payment services and data enrichment platform, has revealed that 78 per cent of 18 to 34-year-olds have had a loan application rejected. When asked why they had been disqualified from a loan, 12 per cent were told they didn’t have enough credit history to qualify, while 11 per cent were rejected because they were unable to prove their financial history.

Tink also revealed that younger people are abandoning ‘arduous’ applications, with no tolerance for any type of friction in loan application processes, meaning they may not be capitalising on the financial services available to them.

From Tink’s survey of 1,000 UK borrowers, 22 per cent of 18 to 34-year-olds abandoned a loan application and used a different lender because the process was too cumbersome. Meanwhile, when applying for a loan, 20 per cent of respondents said they had the correct documents, but abandoned the process because they needed to submit them manually (such as having to print them off and post them).

Another Tink survey of 200 UK lenders supports these findings, with research showing that 36 per cent of lenders cite manual income verification as the point when they see the most drop-off in the loan application process.

Similarly, the research suggests that cumbersome manual processes can be costly and time-consuming for lenders. Thirty-two per cent of lenders surveyed cite manual income verification as the most time-consuming step in their own risk decisioning process, and 25 per cent say document validation (capturing application information and analysing its authenticity) is the highest cost they face.

‘Harnessing data-driven risk decisioning solutions’

Jack Spiers, banking and lending director at Tink, commented: “Our research highlights a clear access issue amongst younger generations trying to borrow. Not only are a significant amount wrestling with cumbersome application processes, but they’re also being rejected for loans based on factors that suggest blinkered financial assessments.”

As a solution to overcome these barriers, younger age groups cite a willingness to give lenders permission to view transaction data from their bank accounts in return for smoother application processes and a better chance of securing a loan.

In fact, 40 per cent of 18 to 34-year-olds surveyed would enable lenders to digitally view transaction data from bank accounts to improve the application process, while 57 per cent would prefer the option of having loans tailored to their financial situation.

While the financial industry is often seen to move slowly when adapting certain areas of offerings and application processes to customer needs, Tink research suggests lenders are aware of the need for change.

Seventy-eight per cent of lenders surveyed agree reducing friction in the lending application process is important and would give them a competitive advantage, while 77 per cent say it’s crucial to improve risk decisioning models to give a more accurate view of people’s finances.

Spiers also added: “It is important lenders are harnessing data-driven risk decisioning solutions to offer fair, accurate affordability checks, while also removing the friction associated with manual application submissions. And it’s not just benefiting the end user. Adopting these models can help lenders too – boosting customer acquisition through improved success rates, while reducing operational costs.”

Payment services and data enrichment platform Tink has joined the SEPA Payment Account Access (SPAA) scheme, which aims to transform account-to-account (A2A) payments in the EU.

It has entered the official register to become one of the first participants of the European Payments Council’s newly launched SPAA scheme.

SPAA is designed to unlock the potential of open data access while ensuring that banks are adequately motivated to invest in maintaining their application programming interfaces (APIs) and real-time payments infrastructure.

Tink has been a founding member of the SPAA Multi-stakeholder Group (SPAA MSG) since 2019. After five years of development, the launch of the SPAA Rulebook and Scheme Default Fees in November 2023 marked a significant milestone for account-to-account (A2A) payments in the European Union.

This rulebook establishes a benchmark for an industry-led approach to capitalise on the dual opportunities presented by open banking as well as instant payments.

“Having played a key role in shaping SPAA to this point, it’s brilliant to be among the first participants to join the scheme,” said Andrew Boyajian, Tink’s VP of payments and customer experience. “From the very first industry discussions five years ago to create SPAA, Tink has been convinced that a sustainable and commercial model that benefits all parties was key to realising compelling and competitive A2A payment solutions.

“But this is just the start. We encourage banks and other third-party Providers to join us in SPAA and help bring about a new era in A2A, delivering choice and innovation to European payments.”

According to Tink, SPAA can bring increased choice and payments innovation across the EU, improving existing payment flows, support emerging new use cases, as well as offering improved overall customer experiences that can drive further digital adoption.

It provides a modular framework, enabling users to integrate different services and customise payment solutions, such as dynamic recurring payments and transactions with multiple recipients. This flexibility enhances user experiences as well as lowers expenses for merchants.

It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.

We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.

Today’s instalment centres on the dynamic field of payments, offering insights and forecasts from industry experts who shed light on the evolution of payment technologies, the importance of customisation and convenience.

Innovating B2B payments

In 2024, there will be an increase in payments digitisation for businesses, driven by the pursuit of efficiency, says Stacey Sterbenz, general manager, UK commercial at American Express.

“Business-to-business (B2B) payments have lagged behind consumer payments when it comes to innovation and leveraging technology. In 2024, we will see an increase in the digitisation of payments as business continue to see the benefits of automation.

“To help maintain healthy cash flow, businesses will look to find efficiencies in their payments processes. Payments automation has been gathering momentum as businesses turn to technology to improve efficiencies and free up finance teams’ time.

“Our recent research found those businesses who have automated payments are reaping the benefits; nearly half (46 per cent) have saved time, and two fifths (39 per cent) have seen fewer errors as a result.

“We’ll continue to see businesses leveraging data and analytics to better understand customers’ behaviour, helping them identify the most efficient digital payment options that help improve working capital. We expect the need for greater efficiency to continue to be a driver of innovation for businesses next year.”

Focus on Pay by Bank

Tom Pope, SVP payments and platforms at Tink, a payment services and data enrichment platform, believes that Pay by Bank has reached a critical juncture in its momentum.

“If you look back over the last 50 years, every payment method that found mainstream adoption – cheques, cards, mobile wallets, buy now, pay later reached a tipping point in its momentum where that adoption became all but inevitable. We believe Pay by Bank has reached that point.

“Only two years ago, Pay by Bank availability was limited to fringe use cases in select markets.

“But now we’ve reached the point where it’s becoming available to merchants everywhere. For example, Adyen, one of the biggest payment platforms in the world, is making it available to all its UK merchants and rolling it out across Europe. And the number of leading companies across all areas of financial services that now have open banking at the core of their offering is increasing all the time.

“Plus, the Pay by Bank user experience – already competitive – is only going to get better. So we think there is a clear advantage for merchants that are early adopters. By tapping into the demand that already exists for a simple, secure, and streamlined payment experience (at low-cost), merchants can differentiate themselves in 2024 from the competition with Pay by Bank.”

The rise of tap-to-pay

2024 will be the year tap-to-pay technology becomes truly embedded in the way small businesses and sole traders take payments, according to Richard Carter, founder of digital payment app Lopay.

“Millions of people already manage their entire life through their smartphone, so for mobile devices to become the primary way we pay for things seems like a natural evolution,” he said.

“The change is already underway. Official data from UK Finance shows that in 2022, 30 per cent of adults were registered with at least one mobile payment service, with that figure climbing to over half among the under-35s.

“Next year we’ll see the technology be embraced beyond these primarily young early adopters. For consumers, the ease of paying for things by just tapping their phone onto a merchant’s phone makes the appeal of tap-to-pay obvious.

“But we’ll also see a big shift among businesses, for whom tap-to-pay removes the need for cash, cards, card readers or tills, reducing their costs and streamlining the sales process. It also removes barriers for businesses who have traditionally only taken cash, as now, with just a mobile phone, anyone can accept contactless payments, wherever they are, in a matter of seconds.”

Wider payment options

Moshe Winegarten, CRO at payment service provider Ecommpay, emphasises the need for diverse payment options.

“The payments industry has enjoyed lots of innovation this year, as well as open banking consolidation and increasing demand for local payment methods across Europe, Asia, Latam and Africa.

“With more pressure on how and when we use our money thanks to rising inflation, payment tech couldn’t be complacent. Given recent Ecommpay data shows us that 72 per cent of consumers are likely to abandon items at checkout if their preferred method of payment is not available, businesses needed options from their payment providers.

“And that’s what they delivered. One in five consumers have now used open banking as a payment method (19 per cent), 14 per cent of shoppers have increased their subscription payment use, and BNPL services are also experiencing increased use with 39 per cent of consumers using the credit option more. Merchants have been conscious of the wider payment process too, prioritising the optimisation of transactions and reducing fraud.

“For 2024, the outlook is positive as inflation rates have significantly decreased. We can expect APM growth for Africa and Europe, more consolidation of open banking providers, as well as in the orchestration space, and with new fraud regulations coming into effect, the security and safety of transactions will remain a priority next year.”

Giving more choice

Providing payment choice, convenience and customisation has never been more important to business buyers as we head into 2024, agrees Brandon Spear, CEO of B2B payments and invoicing network TreviPay.

“Merchants have an opportunity to gain a competitive advantage by perfecting the payments experience. Our recent research of 300 global business buyers highlights 72 per cent of business buyers are more loyal to a business that offers their preferred payment methods.

“Flexibility with payment options is so important that 78 per cent feel it is necessary for merchants to offer invoicing, and 51 per cent wouldn’t think twice about switching to a different merchant that offers flexible net terms.”