How will open banking impact and improve the hospitality industry? | Talk Business
18 febrero 2021
Card transactions currently cost UK businesses around £8 billion a year, with an average 3% transaction fee charged by some of the leading payment providers. At the moment, payments for these transactions also currently take around three to four days to be charged.
Open banking is where authorised providers can access general consumer banking through third-party applications.
The current process is expensive and has several middle men involved, but payments via open banking are instantaneous, with blended transaction rates of just 0.3-1% and no charge back fees. This has the potential to save UK businesses thousands of pounds, estimated between £5-10k per year.
Sina Yamani, CEO of Yoello, a payment platform that offers online ordering solutions to support businesses with improving efficiency, has spoken to Talk Business on what open banking means for the hospitality sector.
1. Cost saving
“Businesses will benefit from significant savings. This is due to the fact that there won’t be any chargebacks, and also the transaction fees will be a lot less, which can normally eat heavily into a business’s profit margin.“
2. Improved cashflow
“Off the back of the global pandemic, businesses’ finances have been majorly affected in a lot of industries. Hospitality has obviously been one of the industries that have taken the hardest hit. However, the promise of instantaneous transactions will enable hospitality and retail businesses to re-stock and manage their cashflow with greater ease.”
3. Easier to manage finances
“Small businesses especially will benefit from this. As payment transactions can happen instantly, it will be easier to manage finances and reduce financial admin. A lot of smaller businesses don’t have the money to spend on outsourcing someone to help with this, so this will allow greater internal visibility on transactions and save managers a lot of time.”
4. Customer experience
“Yoello is an example of how technology, open banking and apps can create a better customer experience. Through technology, customers can enjoy a better, seamless and a more interactive order and payment experience with tech-led functionality that allows, for example, bills to be split and payments to be made easily from multiple bank accounts.”
5. Won’t take advantage of changing situations
“I’ve recently read that Mastercard are going to be increasing their fees by around 5x when purchasing goods from Europe because of Brexit. This is another reason as to why open banking is important to disrupt the monopoly that the payment giants currently have in the market, allowing them to take unfair situations of things like Brexit and make unfair profits.”
Yoello, which has supported thousands of hospitality businesses through its multi-award-winning order and pay platform since launching last year, is currently developing its own open banking platform which will be launched later in 2021.
Find out directly from hospitality merchants how order & pay has helped to improve operations and increase revenue.