Online retail
Payment technology
Payment technology
February 19, 2024

Myth or reality: does Pay with Bank transfer benefit merchants?

Bank transfer benefits for merchants: myth or reality?

Payment technology
Payment technology
Payment security
Payment security

Online merchants are constantly exploring new ways to streamline transactions and enhance customer satisfaction. Cards and digital wallets are prevalent, yet offering customers the option to pay with bank transfer can offer untapped advantages.

While merchants recognize the increasing importance of locking down security and minimizing fraud, they value customer experiences and accelerating revenue. Our recent study highlights that online merchants are facing huge losses due to fraud — £157 billion in 2022 — and could lose even more to false declines. Still, the true benefits of Pay with Bank transfer (PWBT) are not yet embedded among this audience.

Meanwhile, data in the same report paints a compelling picture of bank transfer as a growing payment method: open banking transaction numbers have doubled year on year, soaring to over 68 million transactions in 2022 from 25 million in the previous year. So, why don’t more merchants offer this payment method?

Here, we’re unpicking the truth from the myth; is PWBT as a payment method an emerging revenue driver for merchants?

Does PWBT reduce transaction costs?

Absolutely. One of the most appealing aspects of bank transfer for merchants is the significant reduction in costs. Unlike card payments, which often incur fees, bank transfers typically involve lower transaction costs. This allows merchants to maximize their revenue by avoiding additional charges associated with other payment methods.

Can PWBT minimize fraud risk in eCommerce?

Bank transfers provide an added layer of security, reducing the risk of chargebacks and fraudulent activities. Once a bank transfer is completed, it is generally irreversible, providing merchants with greater peace of mind and stability in their financial transactions.

Pay with bank transfer is a highly secure, bank-initiated authentication. Unlike card payments, no payment credentials are shared. When a customer makes a payment using open banking, they are always sent to the bank’s app to authenticate, usually with biometrics. In addition, working with a payment processor like Nuvei provides real-time fraud detection and scoring to stop transaction fraud before it can take place.

Does PWBT give merchants faster access to funds?

Yes. While card transactions may involve delays in funds settlement, bank transfers often provide merchants with quicker access to their money. Once Pay with Bank transfer is initiated, the funds are typically available in the recipient's account within a shorter timeframe compared to the processing times associated with some card transactions. This accelerated access to funds can be particularly advantageous for businesses with cash flow considerations.

Is it complicated to integrate PWBT?

Contrary to many merchants’ concerns, adding Pay with Bank transfer need not be a complex, time consuming process, nor does it require heavy lifting in terms of workload. Adding PWBT to your payment stack can be done almost instantly.

Working with a payment service provider like Nuvei can offer merchants a variety of core acquiring services and alternative payment methods along with value added services through a single integration.

Reduce chargebacks with PWBT

PWBT spare merchants from many of the costs and complexities associated with disputing chargeback claims. Chargebacks can be costly, requiring time and resources to resolve, so minimizing their impact contributes to a more streamlined and efficient payment process, allowing merchants to focus on their business rather than payment disputes.

Source: https://www.mymoid.comBank transfer chargebacks can only be initiated by customers who claim that the transfer was fraudulent or unauthorized, as they have no protection for other issues, such as product or service quality or delivery. Bank transfer chargebacks involve only the merchant, the customer, and the bank.

Accepting PWBT also aligns with regulatory and compliance standards. It demonstrates a commitment to following financial regulations, which can be crucial for businesses operating in a highly regulated environment. By adhering to established banking practices, merchants can enhance their reputation and credibility in the eyes of both customers and regulatory authorities.

Building customer trust and confidence

For consumers, PWBT offer a suite of advantages. They are quick, convenient, frictionless and completely secure. Notably, users have visibility of their bank balance before a payment is completed, supporting effective budgeting and financial management.

Accepting Pay with Bank transfer can build trust and confidence in your business, as customers begin to appreciate the transparency and simplicity of this payment option.

Our whitepaper reveals that nearly 69% of customers express a reluctance to spend time entering unnecessary card details online, and 42% of shoppers would be deterred from returning to a retailer with a slow and cumbersome checkout process. Establishing trust with your customer base is crucial for long-term success, and offering PWBT can contribute to a positive perception of your brand.

Choosing the right payment methods can make a significant impact on an online merchant’s revenue generation, yet the benefits of PWBT aren’t widely recognized. In the UK, it offers many benefits including reduced transaction costs, enhanced security, and faster access to funds. By embracing bank transfers, merchants can create a seamless and reliable payment experience for their customers while optimizing their operational efficiency and financial stability.The integration of bank transfer is key to providing a comprehensive and secure payment suite.

Our recent study, Reaching the tipping point: How to realize the potential of Open Banking payments, was conducted in collaboration with Pay with Bank transfer powered by American Express. The study presents data from 1000 UK consumers who were surveyed about their views on Open Banking. The paper assesses the benefits and challenges of PWBT from both a consumer and merchant perspective. To learn more about how Open Banking payments can benefit your business, download the study here.

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