Retailers using Payment Initiation Services could save millions on transaction fees during the festive period
Source: Yolt Technology Services
Retailers using PIS as a payment method this Christmas could save up to 80% of the cost per online transaction, contributing to overall savings on transaction fees of millions of pounds for the retail sector, according to leading Open Banking provider Yolt Technology Services.
Online retail sales have been gradually increasing throughout 2020, with the ONS reporting a 6.4% increase in online sales during October 2020, driven by early Christmas shopping. And with online sales during the week leading up to the Black Friday trading period 56% higher than in 2019, 2020’s Black Friday and Christmas period is expected to break online sales records. PIS will be crucial for retailers to cope with online demand, providing an accessible user experience, and maintaining profit margins.
PIS allows consumers to complete transactions through their banking app, by using their familiar banking authentication methods, ensuring a more secure and efficient payment way than traditional card payments, as the consumer goes through the bank’s security measures rather than a third party’s with no settlement period or transaction cost. With the average UK transaction fee for standard payments sitting at 2%, reducing these costs at a time when physical sales are expected to drop due to shop closures will be crucial to recovering strongly from the pandemic’s impact.
Leon Muis, Chief Business Officer at Yolt Technology Services, comments:
“Retailers already using PIS will have been in a better place to cope with the Christmas surge and adapt quicker to the changes brought on by the pandemic, with more consumers than ever making purchases from home rather than the high street. Those retailers who can offer the best digital experience will come out best and PIS will be playing an important role in helping retailers deliver an efficient and faster process for consumers, while saving money at the same time.”
With the potential for retailers to save large amounts of money through lower transaction costs, it’s no surprise that Yolt Technology Services’ recent Unlock the Value of Open Banking report found over half (56%) of retail companies not yet using Open Banking systems saying they were strongly considering adoption.