As reported on Payment Expert, Klarna Kosma, the Open Banking platform from the Buy Now, Pay Later firm, has been shut down after less than 18 months.
In a recent episode of iGaming Daily, Martyn Elliott, Senior Media Manager at SBC, discussed Open Banking’s potential evolution within iGaming with Payment Expert’s Editor, Joe Streeter.
Joe Streeter also known as payment guru shared his opinion on some important points regarding Open Banking.
“Open Banking and gambling is massive. Well, it has the potential to be massive. As we’ve seen in other spaces, the tech is really sort of transforming payment journeys across retail and across e-commerce. We have seen that the best principles of e-commerce payments can be taken into gambling payments. It takes time, but they can be taken there and the iGaming payment journey can benefit from them.”
He added that the problem in this area is some countries’ lack of maturity. This is something to overcome before there’s any benefit of Open Banking when it comes to boosting efficiency in the payment journey in iGaming.
Streeter continues that one of the big signs of relief for the iGaming industry and for customers to evolve Open Banking is affordability checks.
“That does present a challenge as well, but they are essential to safer gambling and to a safer gambling climate. But they aren’t going to be overly intrusive on the majority of customers or players. So that’s where Open Banking tech can come into force.”
Some good examples we see in Scandinavia. “We’ve seen it break down barriers in terms of KYC and really break down barriers in terms of access to data. It can enable operators to build a better picture of what a customer’s, player’s financial picture, and financial background look like without getting them to post their bank statements or show pictures of their bank statements, or their wage slips, that type of stuff that is going to just lead to hesitation from players. It’s not nice to ask somebody to do it. But with open banking, that journey, that process is far smoother, or it can be far smoother if we really tap into it.”
Martyn Elliott added that all our safer gambling interventions are really positively received by players and act on them really well, apart from when you ask them affordability questions. And quite often the risk of losing those players is really high because they become angry with the system.
“I think anything that avoids that while still maintaining that kind of player safety level around the affordability issues is going to be really valuable once we get that up and running properly,” Elliott pointed out.
Thus, one of the key things with Open Banking is that checks can go on in the background and they can go largely unnoticed by the players. That is a really positive thing in terms of customer retention.
The two also talked about PSD3 (the third Payment Services Directive): the new Directive from the EU Commission. This focuses specifically on the licensing and authorization of payment and e-money institutions.
“I do think we need to be prepared for this [PSD3]. Likely, we are at least a couple of years away, but at the heart of PSD3 will be data sharing. I think there’ll be some stability brought to data sharing. I think what that will lead to, and it all sort of relates back to Open Banking, stronger communication between banks, processors, and merchants, and the whole payments ecosystem.
“If we’re prepared for PSD3, I think this will boost the customer journey. And it can enable banks to eradicate friction from each aspect of the customer journey as well. Even getting rid of those false declines that are so annoying for consumers.”
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