How Open Banking Is Powering Faster, Smarter, and More Secure Payments

Payment methods across the globe are becoming faster, more secure and more convenient. Waiting multiple days for payments to get settled and visiting bank branches for basic banking services is a matter of the past. Thanks to Open Banking, paying and getting paid happens in real time, and is incredibly secure and smart.

For businesses, this is very crucial, as customers expect smoother, faster and more secure payment options when they go shopping.

What is Open Banking?

Open banking is the system that allows fintech applications to access your banking data in a secure way, with your permission. Banks open up their systems using something called APIs (Application Programming Interfaces), which allow third party providers like fintech apps to build smarter and innovative services. These innovative ideas brought by fintech players are very smart and insanely user friendly. Especially when you compare them with the traditional applications and services provided by the banks, these services make it easier for you to manage your finances and expenses.

The Shift Toward Faster Payments

One of the biggest benefits of Open Banking is Speed. Gone are the days of delayed payments, waiting long for payment settlements and slow bank processing. Modern systems allow real time payment transfer between accounts.

Real time payments

Whether you are sending money to a friend, paying a vendor, shopping online, Open Banking enables payments to be transferred almost instantly. That means better cash flow for businesses and peace of mind for consumers.

Smarter Payment Systems

Its not just about speed, open banking systems have helped fintech players to invent some really smarter and flexible payment options.

Mobile Wallets

Mobile wallets like Google Pay, Samsung Pay and Apple Pay allow customers to store payment information on your smartphones, securely. They also allow multiple banking services directly through the app. So from a single dashboard, one can access banking services of multiple bank accounts, and that too in a very user friendly way. Mobile wallets allow users to access different payment methods like QR code payments utilising the mobile camera to scan the QR code and contactless payments. For added security, they make use of biometric authentications like fingerprint scanning and facial recognition.

QR Code Payments

QR code payments are one of the most widely utilised payment methods in large countries like China, India and Brazil. Retailers just need to display the QR code near the checkout counter, customers can scan this QR with a smartphone and can complete the payments in seconds. Making it an easy to use and secure payment method. Online shopping websites too is utilising the QR codes to collect payments in a quicker way.

Contactless Payments

Contactless payment method is another smart payment system, powered by NFC technology. NFC allows devices to communicate when in close proximity only. Making it a secure payment transfer method. Smartphones, Contactless cards, and smart wearable like smartwatches allow NFC payments. One just needs to tap any of these devices on the payment terminal, and payment is transferred, you don't even need to enter pin for smaller payments.

Payment Links

Payment link payments is the modern payment method to collect payments quickly from customers, by sharing a unique paybylink url. This is one of the ideal ways for freelancers and social media sellers to collect payments remotely. They are a cost effective solutions, as it don't need costly equipment like POS machines and expensive payment gateways.

Benefits for Consumers and Businesses

For businesses as well as consumers, trying to manage your finances in a better way, modern payment systems make a real difference

Faster payments and settlements

No more waiting days for funds to be transferred and settled. Payments are transferred to your account within minutes, sometimes even seconds.

Higher transparency

Fintech applications allow one to track fund transfers in real time, as well as transaction history allows for better financial planning and management.

Better financial control

With real time data at your fingertips, its easier to make smarter financial decisions, set budgets, and avoid surprises.

Cost savings and higher operational efficiency

Lesser manual processes and fewer intermediaries mean less cost and higher operational efficiency for businesses.

Open Banking is not just a new technology, this helped in the development of most of the modern payment systems. It puts power back in your hands, offering speed, transparency, and control over your financial life. For businesses, this not only made getting paid faster, it also improved the overall operational efficiency as well as enhanced the customer experiences.