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Fraud has historically been one of those nagging pains for many businesses that seem to come and go but never get resolved. This is why the need for secure payment methods are often searched.
Within the last decade, financial fraud has been on the rise and it can be daunting for businesses and customers when transacting online. The scope of the environmental pressures has led to consumers demanding protection and becoming more conscious when sharing sensitive banking information. This article will outline how open banking aims to fill this gap and create a safer and more secure way to pay.
What has caused this risky landscape?
Since the pandemic, companies have gravitated towards digital operations, which have compromised cyber security and financial data, putting them in a vulnerable position. Meanwhile, fraudsters have become savvier in creating crafty ways to obtain such information.
PWC state that '46% of surveyed organisations reported experiencing fraud, corruption or other economic crimes in the last 24 months.'
This expresses the need for a payment method that is protected and trusted among consumers and businesses, especially when dealing with higher transaction values.
Open Banking to the rescue
Open banking presents a new way of preventing fraud, and it seems to be outshining any solution currently in the mix! Here's why:
Strong Authentication
When transacting through open banking, customers are redirected to their most trusted source- their bank. In order to log on to their online banking app or web portal, authentication is required in the form of Face ID, fingerprints, or security passwords. Without authentication, customers cannot complete the transaction.
This eliminates the risk and ensures the customers themselves are carrying out the transaction. With this in mind, chargebacks and disputes are controlled, as customers will need to be present at the time of each transaction. Therefore, reducing chargeback and the high costs associated.
What a way to make those hackers' life difficult!
No account information is shared
Unlike some traditional payment methods, the amount of information shared with the organisation or third party is restricted. The end users' account details and login credentials are not shared with the business.
With data breaches being a significant loss for businesses, this minimises the risk of sensitive information being exposed. Giving the customer reassurance and building confidence when transacting online.
Payments are instant
If the above isn't enough, there's more. Open banking's real-time funding is a game changer for all involved. Payments are instantly taken from the customer's bank into the business bank, and there is no barrier between funding. The payments are not held up through a third party, again limiting the likelihood of exposing sensitive banking information in cases of breaches and fraud. Payments leave one account and enter the other within seconds.
With such security measures in play, it is fair to say that open banking is more securer than paying through traditional payment methods such as card payments online.
Transact with confidence, try open banking with Blink and explore the possible.
