Open Banking: the benefits for collections

Open Banking is a way of allowing organisations to enable customers to make payments via their bank account, with their permission, without having to enter card or bank account details.

Benefits for collections

There are many benefits of using Open Banking.

Security

Perhaps most importantly, security is strong, the service is regulated and the customer remains in control.

Their bank will use Strong Customer Authentication (SCA) to verify their identity when making the payment to help prevent fraud. The customer’s identity must be authenticated by at least two of the following:

• A password or PIN
• A mobile phone or card-reader
• A facial or fingerprint scan

Regulated service

The UK’s nine largest banks and building societies are required to offer Open Banking, however an increasing number of smaller banks are also offering the service. You can see the current list of regulated providers.

Because the service is regulated, customers are protected by data protection legislation, can make a complaint to the Financial Ombudsman Service and banks and building societies will normally refund the customer if an unauthorised payment is made.

Customer control and adoption

Because the customer is in control of authorising the transaction, this almost completely removes the likelihood of chargebacks.

Because it is easy to use and a service that is becoming more ubiquitous, and therefore more familiar, customer usage and take up is strong.

In our experience, the easier you make it for customers to pay their debts, the better their engagement in the process, which results in stronger collections.

How Excel is using Open Banking

Excel’s usage of Open Banking is to allow our clients’ customers to use it as a way to pay part or all of their outstanding debt.

The secure payment interface interrogates our systems to understand the amount outstanding, using the customer’s unique case reference number, then allows the customer to decide what amount they want to pay on that occasion.

This data is then sent to the customer’s bank via their device, so that they can then authorise payment on their device using the security controls set up on their account.

Excel does not receive any of the customer’s bank details.

Once the transaction is complete, their case is updated on our system and payment will be remitted to our client.