How Open Banking payments can improve UX and prevent card fraud

Since the introduction of Open Banking, card payments are becoming a thing of the past and so is the difficulty we have when using long numbers and pieces of plastic. Do you remember when a scribble on a piece of paper is what was used to prevent card fraud? It was called a signature right? Well, luckily that is something that we have outgrown.

We are all very familiar with trying to find your card details when buying something online, or needing to enter your pin in a card machine when you are out for a meal. The user experience of card payments has become second nature. However, there are better more efficient ways of making payments. The rise of contactless and e-wallets are over-powering traditional card payments by rapidly improving how we interact with payment processes.

Ultimately, consumers want to be able to make payments as easily as possible; especially in a world where 87% of consumers will abandon their shopping if they feel a checkout process is “complicated”. Businesses need to adapt the payment systems they use to suit the new consumer demand. Guest checkouts are also a controversial issue in e-commerce. There are still numerous websites who force consumers to sign up to be able to make a purchase. This involves forms of data that are stored by the company, so that the consumer doesn’t have to re-type details into the checkout system each time they make a purchase. This is another reason as to why consumers ‘drop off’ during a payments journey. Many customers are not keen on allowing their card or personal details to be stored by websites.

Typing in passwords, card numbers and banking details into online sites during payments is generally safe, but “card not present fraud is now 81 percent more likely than point-of-sale fraud.” Card not present fraud usually takes place online or over the phone, using the details of someone’s card without physically having it to hand. Recent statistics published by UK Finance, showed losses from fraudulent CNP transactions for UK issued cards totalled £470.2 million in 2019.

How can we improve the payments flow to help with making checkout processes more efficient and less susceptible to fraud?

Using an Open Banking payments journey could help solve these issues.

First let’s consider UX and how firms can simplify the checkout process. Although Open Banking payments allow for businesses to control the UX more effectively than they can with traditional card processes, they also allow for a safer and faster method of payment or data transfer. This in turn could reduce the need for forms and card details when checking out on a site for the first time. Paying with Open Banking will allow the transfer of personal details and payments given the consent of the consumer, moving towards a frictionless payments service, whereby consumers can buy with fewer clicks and without typing sensitive information into a payment process.

Secondly, fraud can be mitigated by adopting Open Banking payments. They were built with SCA in the flow, confirming a payment via the native baking application on the web or a mobile device, reduces the risk by eliminating card details from the process. It also means that in an app-to-app journey or decoupled flow, the consumer can authenticate payments on their mobile device using facial recognition or their fingerprint to log into native applications, improving the security further. The benefit of these methods is that it limits the sensitive data typed into online forms and uses the native security, that is already built into devices and banking software. Afterall, it is extremely difficult to imitate someone’s face or fingerprint to commit fraudulent transactions on their personal device as opposed to using someone else’s card details.

When you consider the benefits of using Open Banking payments laid out above, it is a no brainer. Payment journeys need to be improved and Open Banking payments are the innovative solution needed to solve the issues that currently exist within the online payments flow.

You can read more details around the benfits of Open Banking payments and the effects that it will have on businesses and payment infrastructure here.


Open Finance is transforming financial services and spreading across further financial products and services. We explore some of the immediate use cases where open finance could make a difference right now.
Financial services

Joe Terry

19th June 2020

5 min read

3 examples of what Open Finance can do right now
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18th December 2019

13 min read

What is Open Banking?

You’ve heard about it. You might’ve even used it. But do you know what open banking really is, the products and services it powers, and how it works? And did you know that it actually refers to two separate things?

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