PAYMENTS
What new business models and revenue streams have emerged specifically because payment APIs made complex money flows simple to implement?
Hans Tesselaar, Executive Director, BIAN APIs have simplified interconnectivity in the payment process, supporting a drive towards retailer success and customer satisfaction. A key example of a business model emerging from this re-modelled finance landscape is embedded finance.
Through integrating financial services into a retail platform, as leading players like Amazon and eBay currently do, stores can prioritise customer centricity, addressing the practical concerns of a consumer frustrated with strung-out payment processes.
This intent to address practical concerns also applies to split payments, which enable multiple parties to be paid from one transaction.
For websites like Etsy, where creators sell their goods to an international buyerpool, this revenue stream is fundamental, enabling both host and seller to be instantly reimbursed.
The useful nature of data-driven personalisation, too, has been significantly improved with the addition of APIs. Whether determining location, the frequency of website visits or their preferred way to pay, this information allows retailers to implement dynamic pricing across regions, amended to align with customer demand.
Ian Campbell, Director of Solutions, Equals Money x Railsr Klarna is the obvious example of a great embedded finance success story, allowing customers to split payments or enter a credit agreement via a simple financing application at checkout, but it’ s just the start.
Uses range from luxury brands offering exclusive payment cards with personalised rewards to B2B or B2C travel companies providing seamless currency solutions.
For companies with elevated risk profiles, the challenge usually lies in approvals and compliance, leading to difficulties in processing payments quickly.
In a market like e-gaming, which has pioneered micropayments, smooth transactions are essential to player experience, but fraud and AML controls are essential. This involves a proactive approach to compliance from the onboarding stage.
Close collaboration ensures alignment on the information and checks required, reducing fraud risk further down the line and speeding up reconciliation for customers who have already been cleared.
fintechmagazine. com 103