The value of account-to-account payments
Account-to-account payments, built on an open banking infrastructure, allow customers to access their bank accounts and transfer funds directly to a merchant in just a few web clicks or mobile taps. This bypasses credit card entry, fees, delays, and chargebacks — all while being fast and secure.
In this blog post, Vonage partner — and secure cloud payment specialist — PCI Pal explores five compelling reasons to implement a pay-by-bank method in your contact center payment process. You’ll learn how this can solve the most common payment problems merchants face today.
Reason 1: Increase conversions
Pay-by-bank payments offer a convenient checkout experience for customers. It starts by eliminating the need to manually enter credit card details or create accounts with third-party payment providers. Customers can simply log in to their online banking platform and complete the transaction in a few clicks.
Pay-by-bank payments are considered faster, easier, and more secure than card payments. And while phone payments have been prevalent for years, the rise of phone scams has caused consumers to become rightfully wary of giving their financial information through this channel. Online security is also a cause for concern, with consumers now demanding choice in when, where, and how they pay for goods and services.
By offering pay-by-bank as a payment option in the contact center, merchants can reach a broader range of customers who want ease of payment and peace of mind that their financial and personal information is safe. Also, pay-by-bank payments have been shown to convert up to 40% better than cards because the option is designed for digital and mobile-first consumers.
This streamlined experience reduces friction and eliminates the need for customers to switch between different platforms or manually enter payment details. By offering a seamless payment experience, you can increase customer satisfaction, reduce abandoned transactions, and encourage repeat business.
Reason 2: Enhance security and fraud prevention
Ecommerce losses to online payment fraud were estimated at $41 billion U.S. dollars globally in 2022. The figure is expected to grow further to $48 billion U.S. dollars by 2023.
With pay-by-bank payments, consumers don’t need to share their credit or debit card details with merchants. Instead, the payment is made directly from their bank account. This reduces the risk of card information theft, as no card data is involved in the transaction that could be compromised.
Pay-by-bank helps protect a customer’s financial information and prevents your agents from being exposed to sensitive card information. It also protects merchants against consumer fraud.
Pay-by-bank payments typically involve strong two-factor authentication (2FA) to connect to banking apps. When customers initiate a payment, they’re redirected to their online banking platform to log in using their secure credentials. This ensures that the person initiating the payment is the authorized account holder — which reduces the risk of unauthorized transactions.
Phone apps use facial IDs or biometric security to ensure the mobile payment journey is safe. The open banking provider and the merchant also have security measures, like 3-D Secure (3DS), within their infrastructure to prevent fraudulent behavior.
Reason 3: Provide instant refunds
It can take up to 10 working days for a refund request to be issued back to the payment card. Instant refunds are completely different.
Instant refunds, enabled by open banking technology, improve the customer experience. That’s because customers can see money returning to their account immediately, rather than waiting for a card payment to clear. The results are happier customers and repeat business, especially if the money is there for them to spend again.
Instant refunds boost your reputation and customer experience. Just as important, your agents save time by not having to chase and track refund payments for customers.
Reason 4: Reduce cost of taking payments
Processing card payments typically incurs fees, including interchange fees and merchant service charges. Pay-by-bank payments offer a cost-effective alternative, as they involve lower transaction fees compared to card payments. Implementing pay-by-bank in your contact center reduces your payment processing costs, improving your bottom line. These cost savings can be particularly significant for businesses that handle a high volume of transactions.
Reason 5: Minimize chargebacks
Chargebacks allow consumers to dispute a payment they’ve made using their credit card and submit it to their bank for reversal. The decision then rests with the customer’s issuing bank to either agree with the consumer or the merchant. If the bank decides that the merchant is at fault, the merchant is required to refund the consumer and pay an additional fee for the bank’s troubles.
Further research estimates that the merchant cost of chargebacks will exceed $117 billion in 2023. In addition, the average chargeback will cost merchants $3.60 for every $1 in sales.
Pay-by-bank payments eliminate chargebacks by avoiding credit card processing entirely. Since there’s no card network involved, there is no chargeback process. The consumer also benefits from a more streamlined experience. For example, if something goes wrong, only three parties with direct relationships — the customer, merchant, and open banking payment provider — are involved in the resolution.
CX leadership, trust, and reputation
Implementing pay-by-bank payments in your contact center brings numerous benefits that can revolutionize your payment processes and customer experience. Enhanced security, streamlined customer journey, faster settlement and refunds, and lower transaction costs are all compelling reasons to embrace the technology. By staying ahead of the curve and leveraging the power of open banking, you can position your contact center as a leader in customer experience, build trust, and safeguard your reputation.
Enhanced customer payment journey and experience
PCI Pal goes beyond PCI DSS compliance. We’re now focused on creating new revenue generation and cost-benefitting solutions for contact centers. In fact, businesses turn to our next-generation payments to enhance their overall payment journey and customer experience.