The customer knows best: How to ensure you’re delivering an effective digital payments experience

It's been more than five years since regulations around open banking, which reflected the changing nature of how consumers engage with banking and payments in this modern age, came into force. Cash is no longer the dominant form of payment; just 6% of the UK population uses cash for most things or everything, according to statistics from the UK government, with most people's experience with payments now predominantly digital. As such, the concept of open banking has become more ingrained in the systems and platforms we use every day.

One key element of this is account information services (AIS) which ventures like NatWest's Payit™ have launched. Providers that offer AIS allow businesses, including large organisations across sectors including hospitality and retail, utilities, and insurance, to give their customers a much better experience while making payments. It’s a form of data sharing that uses the same guardrails as the open banking protocol to offer control, security, and transparency to make life easier for customers and provide a competitive edge in the sector.

Tapping into changing customer behaviour

With the rise of the internet in the early 2000s and changing user habits, the archaic methods of siloing data within the walled gardens of massive financial institutions appeared less and less sustainable. This is where the concept of open banking emerged.

Open banking, which was born from the rise of the internet and the ability to access banking systems online, allows financial data to be shared between institutions through application programming interfaces (APIs). Banks have traditionally kept customer financial data closed off, but open banking has allowed customers to share their financial information between different platforms securely, including payment providers.

Open banking offers greater transparency and control for account holders and has led to a boost in the number of services that can be provided. Now, at least one in seven in the UK use open banking, according to research from Open Banking published in March 2024 — which was up from one in nine in June 2023. The number of open banking payments reached a record high of 14.5 million in January 2024, which represented a year-on-year growth of 69%.

As customers engage more through these services online, they also want the ability to access their information quickly and efficiently, in a friction-free experience. Whether setting up a direct debit with an insurance company or checking their account — theyu would like the option to glance at and review their bank account information too, among other functions. This much smoother user experience is only possible, however, if businesses embrace AIS, which providers like Payit™ now offer. Licensed AIS providers (AISPs) offer businesses’ customers an end-to-end encrypted view of information to improve the customer journey. This is a key cog in the mission to create a landscape that truly and completely accepts the principles of open finance.

Payit's mission to create a better customer experience

With the launch of AIS in June 2024, available to business customers who bank with NatWest, Payit™ can allow customer attribute sharing immediately, starting with the name of the account holder, the account number and sort code. These data points will soon be joined by transactions and a transaction history for affordability calculations. It's suitable for companies that need a nominated bank account to show the source of funds, or those that want to make easy and repeated attended payments like topping up a utility account or making a loan overpayment. Ultimately, though, it's underpinned by a one-click experience for all — and removes barriers to ensure a smooth and friction-free customer experience.

Merchants that take up Payit™ for AIS will be able to populate information with a one-click experience, capture explicit customer consent, enable real-time information sharing from bank accounts, remove the need for any intermediary agencies, and improve data capture accuracy by eliminating any manual input. This is alongside a batch of benefits for end customers including sharing data immediately, viewing all consents in one place — which expire within 90 days — and built-in protections against identity fraud.

Payit's AIS service can also streamline the direct debit experience. Customers authenticate with their bank using their mobile banking app or online banking login — with the bank then providing data to Payit™. Payit™, in turn, shares this data with the organisation to create the direct debit instruction — holding the consent as proof of the customer's authority to trigger the instruction.

Large businesses that want to make the payments experience smoother and fuss-free for their customers will gain a competitive edge in the market by embracing systems such as AIS, which is being wrapped up and bundled with NatWest's Payit™ Pay Online capability. Payit™ products are secure with locked down end-to-end encryption, and will help your organisation keep pace with industry-leading standards thanks to its ability to embrace innovations and tap into the latest customer trends.

For more information on how AIS could help your business visit Payit™ by NatWest .

Eligibility criteria and fees apply. You must hold a business current account with the NatWest Group and you will need to sign up to full Payit™ terms and conditions. You will need to allocate technical resources to work with NatWest to integrate the solution. Fees are based on the volume and average value of e-commerce transactions. Speak to a NatWest Relationship Manager for further information.