New Open Banking payment method seeks to address consumers’ changing preferences
A recent consumer survey commissioned by Global Payments Inc. (NYSE: GPN) in partnership with YouGov found that both spending habits and expectations of payment experiences are shifting. Consumers want choice at the checkout while looking for ways to better control their finances. Nearly one in five consumers (19%) say they are now more likely to pay for items in full, which can help them manage cashflow and provide a real-time picture of their financial position.
Today, Global Payments is announcing a new payment method offering, Bank Payment, that enables merchants to provide consumers more choice in how they pay. This payment method leverages the direct, secure access to bank accounts made possible by Open Banking and lays the foundation for further payments innovation. Now, businesses can accept payments for products and services directly from a bank account, providing an additional payment alternative for merchants and consumers combining speed and flexibility.
Choice, speed and incentive are key to driving customer loyalty
The survey found that one in four consumers (26%) have abandoned an online purchase in the last six months because the merchant did not offer their desired form of payment, and 18% have gone into their overdraft or had a transaction declined because of slow payment processing. For merchants working to attract and retain customers, presenting more payment options provides an opportunity to cultivate brand loyalty, while reducing abandoned shopping baskets.
More than a third of consumers (34%) said they would be willing to switch to an alternative payment option from their preferred one if it offered an additional benefit. Incentivising customers to use a particular payment method can be a loyalty-building win-win for merchants and consumers.
With consumers increasingly looking for fast, secure payments and the choice to pay in full to manage their finances, Bank Payment presents a new opportunity for merchants to add choice to their checkouts and drive sales.
Younger generations lead the charge in adoption of new payment methods
Global Payments’ survey also found that younger generations are more likely than older generations to use digital wallets, suggesting broader acceptance of emerging payment methods as digital natives become a larger proportion of consumers. For example, Gen Z (18-24s) is more than three times as likely as consumers ages 55+ to prefer digital wallets (13% 18-24s vs. 4% 55+), and direct bank account transfers (7% 18-24s vs. 1% 55+).
Willingness to switch payment methods to receive new benefits was also significantly higher among Gen Z than any other age group (45% 18-24s vs 35% 45-54s and 24% 55+). This is an attitude that will fuel competition among providers to build on Open Banking, as younger consumers won’t hesitate to switch to get the best deal and the fastest experience.
“Adoption at scale of new payment options usually reaches a tipping point when consumers demand innovation or merchants encourage adoption – or both. I believe we are at an inflection point with Open Banking, where we are seeing interest from both consumers and merchants in taking advantage of new innovations in payments. With Bank Payment, merchants have an opportunity to meet all of their customers’ needs,” explained Nick Corrigan, Europe president, Global Payments.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2007 adults. Fieldwork was undertaken between 30 June – 1 July 2022. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).