Hey, so I was reading about how over in Europe they’ve massively promoting ‘p2p’ payments and have launched a European Wide initiative to switch over from card payments through Visa/Mastercard to direct bank app payments (cos they want to reduce their exposure to US companies).
It seems to be that you can use it for both online and ‘physical’ payments - in a shop you scan something with your phone, it opens your bank app and sends over payment.
Isn’t that what Pay by Bank should be doing over in this country? And, if so, anyone know how many retailers might be using it now? The only one I’ve found is Amazon - so not exactly flying the flag for independent UK businesses!
I would’ve thought it would be a good USP for someone like Monzo or Starling to add to their Business accounts - especially for sole traders.
Let them setup Pay by Bank on their accounts, then the process for accepting payments would be something like Retailer opens App, entry details of amount to be paid, generate (QR?) code, buyer scans code to open their bank app and then confirms payment.
No card processing fees so Monzo (for example) could then decide to either add on a (smaller) processing fee, or a monthly subscription if they want. I noticed Monzo seem to have 3 tiers of business plans - Lite, Pro and Teams so could probably tie it into those. On ‘Lite’ you can receive payments up to a certain total value per month and then it’s charged a %, on Pro and Teams it’s a higher total value?
I noticed Monzo does have the option to receive contactless payments - but thats through Stripe and is still a ‘card payment’ even if it’s contactless and Starling doesn’t seem to offer anything like that at all (they don’t even mention their ‘Settle-Up’ service so maybe that’s not even available for business accounts?). Revolut have their own ‘Revolut Pay’ network so wouldn’t expect them to jump over to an ‘Open Standard’ network like this.
Have I got the wrong end of the stick here/missing something?
The big downside for consumers is you have basically zero protection if using pay by bank - no Section 75 or chargebacks are available. Unless they eventually add in some level of consumer protection I don’t see it taking off.
Yeah but you don’t get that with cash either? And if I’m buying a cronut at a local trader at the farmers market, I’m not going to be looking for S75 protection on that.
I recently paid for a service in person using this method. They presented a QR which opened a NatWest PayIt link to complete the payment via Open Banking.
Unless it’s Scan and Go (like AliPay), I just can’t see retailers widely adopting it.
It’s far too slow to open the link, select my bank from the list, allow it to launch my bank app, then go through the approval flow within my bank app, then wait for their side to update. This isn’t going to work in a busy retail environment.
The flow needs to be eliminated almost entirely for Open Banking to become suitable for retail.
Chances are that any future payment system would use Open Banking, but certainly not in its current form. It will likely be used in the background, with pre-approval, via an app.
I can see the advantages for businesses, because they don’t have to pay card fees, although their bank might still levy charges of some sort.
Where’s the advantage for the customer, though? Having to scan a QR code and fiddle around opening your banking app to authorise the payment would be a right faff. It’s much easier just to tap your card and pay contactless, or use Apple/Google Pay on your phone.
I can’t see it taking off at all.
Everything I’ve seen for Pay by bank pretty much glosses over the cash replacement aspect and promotes it as replacing card payments instead e.g. the promo page at Pay by Bank : Securely from your banking app.
That’s probably one of the main problems with rolling this out - it’s focusing on the wrong ‘scale’ of payment - maybe because probably the heaviest exposure to this is if you pay a bill manually and most of those seem to have this as an option now.
There’s shops and businesses where I live that are either cash only or a few of them you can pay by bank transfer (so you need their sortcode and card number). I think, as a bank, that could be a good market to target with a ‘small business/sole trader’ account using this as an option to take payments direct.
I can’t use it on a site like Amazon that sometimes acts weird on refunds as I won’t have protection on this transaction that is like cash. Whenever available, I will always stick to my credit card even if it is a £2 purchase. I have somewhere to run to other than being at mercy of the retailer.
I haven’t come across a cash or transfer only business in many years, and I don’t live in a major population centre either. I’ve no doubt there are plenty of them out there, just not something I’ve come across in a long time.
I guess in those places, it would be a better option to use some form of Open Banking.
Many shops selling African/Asian food are rigid on cash. It takes being firm on them then their POS will work. They put it on display, with even labels that cards accepted. Reach payment and they tell you network is off but there’s an ATM less than a minute away for you to get cash.
We many of them here down south. I keep telling them I only have my phone and they give in. They even go the extra mile of telling you to just go and come with the money next time you are in.
Places rigid on cash would still not like this as it also leaves a trail of the income. It is not only about the fees.
Personally, if I encountered this, I would just put the goods back and leave. And it’s highly unlikely I would return to that business again. If customer convenience means so little to the owner, then I’d rather just go elsewhere. Appreciate it’s not always an option to go elsewhere.
Also appreciate that they might have a valid reason for not taking cards e.g. very slim margins, but their viability really isn’t my problem. I care about convenience.
That’s the route I took after several attempts to force me to get cash.
It is my wife who still goes there. Some are also in London still with similar practices.
I suspect your comments will attract some replies soon enough. I seem to recall we have a few very strong defenders of a cash society on here. Brace yourself.
We also have some taxi companies who are not happy with card payments especially at night when they think you don’t have so many options, they would rather change route to pass where an ATM is. These days when calling for a taxi for any reason I ask if they take card, the moment they say no I hang up.
