One of the most enticing and significant new tools born of Open Banking is Payment Initiation Services.
Payment Initiation is valuable for any organization that wants to send or receive payments digitally, and it’s poised to streamline payment processes while also allowing completely new user experiences.
So, what exactly are Payment Initiation Services, and how do they help your business?
What is Payment Initiation?
Payment Initiation is an online payment system that uses Open Banking. Consumers when using a Payment Initiation Service give their permission for a third-party Payment Initiation Service Provider (PISP) to connect to their bank account and then initiate a payment on their behalf. PISPs use the tools offered by the bank in question to allow transactions in and out of the user’s account, with payments allowed by the user inside the app or platform they are already using, rather than through an external interface.
What are the Benefits of Payment Initiation?
Both businesses and consumers benefit from PISPs. Payment Initiation is a convenient payment choice for the latter, as they no longer have to make a manual transfer from their bank account or check through their wallet for card details. Instead, they are taken on a payment journey that is seamless and efficient.
Payment Initiation improves conversion rates for businesses. Consumers experience more convenient payment journeys leading to lower cart abandonment rates and higher customer satta matka loyalty. Payment Initiation helps companies to retain their clients within their own environment from the start to finish of a purchase.
Integrating with a PISP can be much less costly than establishing relationships with card acquirers and other related parties on your own. This can be a major cost saving factor.
What are Some of the Payment Initiation use Cases?
Payment Initiation Services are being used in a number of different ways now. Financial management apps- thanks to open banking, are one common use case. Financial management apps that use Payment Initiation Services can automatically move funds between a user’s accounts to ensure they remain within credit limits or prevent an overdraft.
Over the next couple of years, consumers will adapt themselves to using PISP integrations as currently they are using chip, pin or contactless methods.