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How to minimise payment card charges: don’t use them

 Payment card charges are increasing regardless of the EU putting limits on interchange. In a presentation at the ACT Cash Management Conference last week, APEXX showed that despite regulation card payment acceptance costs have been rising, as their figure below shows:

Source & Copyright©2019 - CMSPI

They believe that merchants need to optimise the whole MSC not just the interchange by connecting to the APEXX award-winning payment optimisation gateway - see.

Not only this, there are rumours that VISA and MasterCard and their banks are planning to raise the overall fees on payment cards again. Even though the EU Parliament has just passed new rules on cross-border payment charges.

Mostly Open Banking has been a damp squib: lots of talk, but nothing that corporates can use. However, that is changing as new services are starting to emerge. The Open Banking service from Adyen in the UK is an important example.

Open Banking alternative with Adyen

The Payment Service Directive 2 (PSD2) requires banks to provide APIs through which payments can be directly initiated by merchants and their payment partners. At the checkout. customers select their bank from a drop-down menu, they are then redirected to their bank, and which authenticates the pre-filled payment directly. This also means no extra data sharing is needed as everything is authenticated via the bank and there are no payment card charges, just the clearing charge.

Adyen have just set up a PSD2 link to 90% of all the UK major banks and has signed up the Dutch airline KLM as the first big brand to roll out the service.

Added benefits

Adyen believes there is an added benefit for corporates in that the transactions are low cost and non-reversible, as Open Banking payments are considered authenticated ‘credit transfers.’ Unlike direct debits, which are prone to reversals and an inability to collect funds, Open Banking credit transfers benefit from a confirmation of fund availability and an inability for your customers to reverse the transactions. Open Banking payments are secure, as they are actively authenticated by the bank at the time of a transaction, so the merchant can ship the goods immediately.

Dutch experience with credit transfers at point of sale 

Direct transfers from a bank account to businesses has been around since 2007 in the Netherlands. It’s called iDEAL and represents 80% of online payments in the Netherlands. IDEAL. Adyen believes that Open Banking share many characteristics with IDEAL. Consumers select their bank in the checkout, are redirected to their banking environments, and from there authenticate and confirm a credit transfer to the recipient (either an individual or a business).


CTMfile take: The charge for a credit transfer is far less than any type of payment card charge. PSD2 direct credit transfers at point-of-sale will not replace cards, but they will become an important alternative and will save merchants loads.


This item appears in the following sections:
Payments - Collecting at POS
Card Payments at POS
Collecting Payments on the Internet
Collecting Payments via Mobile

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