April 29, 2022
Partnering with payment service providers to enable the next generation of ecommerce in Europe
Farid Sedjelmaci and Richard Kotite
When it comes to how people shop for goods and services, the world is changing. A recent Plaid survey of UK consumers found that 53% of their spending now takes place online, and 30% confirmed that at least 80% of their spending is now done digitally. A growing bulk of global online shopping is taking place via marketplaces, such as Amazon, Etsy, Zalando. By 2023, it is expected that 60% of total digital commerce, or $9.2 trillion, will occur on marketplace platforms.
Behind nearly all of these fast growing ecommerce platforms and marketplaces are Payment Service Providers, a growing group of fintech companies focused on providing merchants and marketplaces with the simplest, fastest payments journeys for their customers and vendors.
Plaid is adding three new partners to our Payment Partner Ecosystem to enable more vendors and merchants to leverage open banking in order to improve operations and lower costs:
NoFrixion - EU-based programmable money API replacing banks with software.
UNIPaaS- an embedded finance platform for B2B SaaS companies, headquartered in Israel and operating across the UK.
Primer - An all-in-one automation platform that lets merchants build the best payments and commerce experience with clicks, not code. A fully-remote company, with UK-based founders.
"We're excited to partner with Plaid to create new shopping experiences and support their mission to democratise financial services. Working with Plaid will mean Primer's merchants worldwide can enable secure and seamless activation of Open Banking and account-to-account payments on their checkout in just a few clicks.” – Nabeel Saeed, Head of Partnerships at Primer
Through these partnerships in Europe, Plaid embeds our open banking payments and account information services within these companies’ respective payments platforms. As a result, merchants and vendors can offer account-to-account payments as an alternative payment method in their checkouts and streamline merchant and vendor onboarding or verification processes.
“NoFrixion is excited to work with Plaid, helping business say goodbye to Internet Banking, online fraud and chargebacks.” – Feargal Brady, Founder & CEO of NoFrixion
Plaid’s open banking solutions help PSPs address two main obstacles: They help enhance merchant bank account verification and lower the costs of doing business. As more of commerce moves online, more fraud moves online in tandem. Plaid’s open banking data network provides permissioned access to vendor and merchant’s financial data so that PSPs can verify and authenticate merchants and vendors during onboarding. This strengthens and expedites the process so that PSPs can keep fraudulent actors away from their platforms and real sellers can get started faster.
Secondly, embedding open banking solutions into PSP payment stacks in Europe means that merchants and vendors can offer account-to-account payments as an alternative payment method to drive down transaction costs while enhancing their customer journeys. PIS was made for the digital financial world, unlike other payment methods. Embedding Plaid’s open banking payment solutions directly into PSP platforms offers merchants and PSPs an opportunity to delight their customers with familiar experiences they encounter in other corners of their online lives.
While cards are the predominant payment method, there are many signals that preferences and behaviours are changing. Plaid research among UK consumers shows that 62% of consumers would avoid merchants that have a poor payment experience, and 36% of people would abandon a purchase from an online business that requires customers to enter in their personal financial information, such as the long card number, during payment. Open banking payments eliminate the need to enter sensitive information through a streamlined, fast flow.
Despite the obvious growth opportunities, keeping up with the tech landscape can be onerous for merchants. Account-to-account payments are an addition to an ever growing list of new payment types, and open banking data for onboarding may seem like an additional complication. Instead, PSPs can offer all of the necessary solutions for improved payment journeys and onboarding so their customers can tailor offerings to the local market needs. If you’re a PSP operating in Europe and looking to offer your merchants open banking payment capabilities, reach out to our partnerships team.