A recent survey by Open Banking provider Yapily, conducted through YouGov with over 2,000 consumers and 250 businesses in the UK, has illuminated significant dissatisfaction among merchants and consumers regarding existing payment infrastructure. Specifically, high transaction fees are highlighted as a major concern for almost eight out of ten merchants when considering new payment options.

Key Issues Identified

Fraud risks were another critical issue, with two-thirds of respondents citing it as a key worry. More than half of the businesses expressed concerns about data breaches and described the chargeback process as inefficient and biased towards consumers.

Merchant Preferences

Nearly all surveyed merchants (98%) prioritize low transaction fees, followed closely by secure systems. About 40% are open to adopting Open Banking-based solutions due to their perceived lower costs with robust fraud protection measures.

Consumer Priorities

Consumers, on the other hand, value convenience and safety highly. For small purchases from familiar brands (under GBP 20), about half of consumers prioritize ease of use over security. However, for larger transactions (over GBP 100) with unfamiliar merchants, security becomes a primary concern for more than half of the respondents.

Consumer Security and Trust

Fraud reduction is seen as an important factor; however, despite its benefits, traditional card payments are still the go-to choice. Open Banking, associated with lower fraud rates, remains underutilized partly due to consumer hesitance.

Challenges and Solutions

The chargeback process has received criticism from merchants who find it overly favorable to consumers. Many call for a streamlined approach or its removal altogether. Yapily’s recommendations include establishing shared value propositions, designing a consumer protection model, and introducing recognizable trustmarks to identify open banking payment options.

According to Yapily representatives, while Open Banking is gaining traction, more work is needed to build trust and improve usability in the sector. The aim should be developing new consumer protections that avoid outdated mechanisms like chargebacks but still offer adequate safeguards for users.