Open Banking Fintech Volt Introduces Transformer to Help Merchants Bypass High Interchange Fees

Open Banking Fintech Volt has introduced a product aimed at helping merchants save on excessive debit card (interchange) fees by encouraging shoppers “to seamlessly switch to an open banking payment AFTER choosing to pay with a debit card at the checkout.”

After recognizing the banking provider of a specific shopper using clever BIN lookup technology, Volt’s ‘Transformer’ prompts the shopper “to instead pay in real time from their bank account.”

As explained in an update shared with CI, a shopper chooses “to pay by card on the merchant’s checkout, reaches for their debit card, and starts entering their card number.”

As mentioned in the announcement, the first six to eight digits are “the bank identification number (BIN).”

Once these are entered, Transformer “provides an API endpoint that tells the merchant: “BIN 123456 belongs to bank X”.”

The merchant then decides how “to incentivize the shopper to instead make an open banking payment.”

After hitting ‘Tap to continue’, the customer will be “forwarded to their banking app and asked to authenticate the payment using their online banking login credentials.” If they’re happy with the summary, “they tap ‘Confirm’ to initiate the payment.”

When the payment is completed, the customer “is redirected to the merchant’s confirmation screen.” Their booking “is complete.”

Their reward points “are earned. And, next time they book, they’ll be more likely to select ‘Pay from your bank account’ when it’s presented at the beginning.”

Statistics show that once you are a real-time payment user, you “are 60% more likely to repeat your behaviour at the checkout.”

Transformer offers merchants “a superior alternative to cards in the form of open banking-powered account-to-account payments.”

It also helps “persuade their shoppers – via an incentive of the merchant’s choosing – to use it.”

Merchants benefit from real-time settlements and smaller transaction fees, but also “improved customer loyalty.”

Data has shown that, once shoppers try open banking payments, “they return for regular repeat purchases.”

Volt’s open payments gateway currently “allows merchants and PSPs to process transactions securely between accounts held at more than 5,000 banks in the UK, EU and Brazil, covering over 680 million bank accounts.”

As covered, Volt is building “the global infrastructure for real-time payments.”

Its network of networks “unites and harmonizes the world’s next-generation account-to-account payment systems, enabling merchants across the globe to accept real-time, account-based payments from their customers – seamlessly, and at lightning speed. Real-time payments, everywhere.”

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