Open banking is reshaping financial services by enabling secure data sharing between banks and third-party providers. This innovation is opening new opportunities for SMEs in Switzerland and across Europe, allowing them to streamline payments, reduce costs, and improve customer experiences. In this article, we explore the future of open banking payments and how SMEs can leverage this trend to stay competitive and grow their businesses.
Open banking refers to the practice of banks sharing customer data with authorised third-party providers via APIs (Application Programming Interfaces), with the customer’s consent. This creates a connected financial ecosystem where payment providers, fintech companies, and businesses collaborate seamlessly.
In Europe, open banking is driven by the EU’s PSD2 (Payment Services Directive 2), which mandates banks to provide third-party access to financial data, fostering innovation and competition.
Open banking payments eliminate the need for intermediaries such as card networks, leading to reduced fees. With direct account-to-account payments, SMEs can lower transaction costs, particularly for recurring payments or cross-border transactions.
Swiss Example: A Lausanne-based subscription service can offer open banking payments to reduce costs compared to traditional credit card transactions.
Traditional bank transfers can take several days to process. Open banking payments facilitate real-time transfers, improving cash flow for SMEs by reducing payment delays.
Fact: The European SEPA Instant Credit Transfer allows businesses to receive payments in seconds, enhancing liquidity and operational efficiency.
With open banking, customers can make payments directly from their bank accounts without entering card details, reducing friction during checkout. This streamlined experience leads to higher conversion rates for online stores and e-commerce businesses.
Insight: Integrating open banking solutions such as Klarna or Revolut offers Swiss SMEs faster and more convenient payment options for customers.
Open banking payments leverage strong customer authentication (SCA), ensuring secure transactions and reducing fraud risks. SMEs benefit from these robust security measures, building trust with customers and minimising chargebacks.
Open banking enables SMEs to access real-time financial data from multiple bank accounts through a single interface. This data integration supports better financial planning, budgeting, and forecasting, giving SMEs a clearer view of their cash flow and financial health.
Switzerland has begun embracing the open banking movement, although at a slower pace than the EU. However, Swiss financial institutions are increasingly collaborating with fintech providers to develop open banking services, providing SMEs with access to cutting-edge payment solutions.
Swiss Financial Landscape Example: The SIX Group, Switzerland’s financial infrastructure provider, is developing an open banking framework to encourage greater interoperability between banks and third parties.
While the future of open banking payments is promising, SMEs may encounter some challenges:
Open banking is paving the way for innovative payment solutions, such as Request-to-Pay (RTP), which enables businesses to send real-time payment requests to customers. As more fintech providers enter the market, SMEs will have greater access to customised financial services, such as embedded payments and BNPL options, enhancing their competitive edge.
Open banking payments represent a game-changing opportunity for SMEs, offering lower costs, faster transactions, and enhanced security. By adopting open banking solutions, Swiss businesses can provide better customer experiences and improve cash flow, setting the stage for sustainable growth.
As the financial ecosystem continues to evolve, SMEs must stay ahead by leveraging open banking tools to remain competitive. Early adoption of these solutions can provide a significant advantage in meeting both customer expectations and operational needs.
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