In the modern business landscape, adopting open payments platforms is no longer optional; it’s a necessity.
A PYMNTS Intelligence report, “Three Things You Need to Know About Open Payments,” a collaboration with Spreedly, reveals three themes about open payments connectivity that every business owner should know.
From safeguarding operations against downtime to optimizing transaction processing and leveraging open banking, these platforms help businesses stay competitive and efficient in a fast-paced environment.
Open payments play a critical role in keeping businesses running smoothly by minimizing the effects of service outages. According to the report, service interruptions can cost Global 2000 companies an estimated $400 billion annually. The financial toll is more significant for smaller businesses, where downtime can lead to customer attrition and repair costs that may include brand trust campaigns.
In a notable example, the July 2024 CrowdStrike outage impacted numerous industries, including banks and retailers. While the outage wasn’t directly related to payments, it highlighted the vulnerabilities of relying on single payment gateways. Open payments platforms mitigate these risks by rerouting transactions through alternative gateways, ensuring that businesses remain operational even in the face of significant technical failures.
Open payments not only improve business continuity but also streamline transaction processing, which can lead to substantial savings. By using open payments systems, businesses can efficiently route transactions based on factors like fees, customer location and payment type. This flexibility ensures that transactions are processed via the most cost-effective gateway, reducing unnecessary transaction fees and improving profit margins.
Consider 16% of consumers report that the available payment methods influence their purchasing decisions. Merchants who fail to offer preferred payment options risk losing customers. Open payments systems cater to this demand by providing a wide range of payment options, helping businesses maintain competitive advantage and boost sales. By optimizing payment routing, businesses can also avoid unpredictable costs, leading to more predictable pricing models and increased customer satisfaction.
One of the most exciting benefits of open payments is their ability to integrate with open banking protocols, creating new revenue opportunities for businesses. Open payments platforms allow merchants to seamlessly incorporate open banking application programming interfaces (APIs), providing access to features like saved payment information and customer data tracking. These innovations can enhance customer experiences, leading to increased loyalty and higher sales.
Open banking is gaining popularity, with 46% of U.S. adults highly willing to adopt open banking payment methods for various transactions. This demand is highest for recurring payments such as monthly bills (40%) and groceries (35%). Merchants who leverage open banking solutions can tap into this rising consumer interest, positioning themselves for future growth and success. Additionally, by offering more personalized payment experiences, businesses can strengthen long-term relationships with their customers, translating to higher revenue and elevated brand awareness.
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