Open Banking for gambling operators
Payments services built on Open Banking bring numerous benefits to gambling companies. Reduced payment and operational costs, a simplified customer experience and instant settlement.
How do Open Banking payments work?
Open Banking providers access customer data stored by banks, with the approval of the individual. They integrate directly with financial institutions via API, letting them provide account information and payment initiation services.
Open Banking is the UK’s implementation of the EU’s PSD2 legislation. These laws require banks serving EU customers to provide APIs for regulated third parties. This makes PSD2 and Open Banking the basis for an EU-wide account-to-account payments system.
PSD2 created two new types of regulated company. Payment Information Service Provders (PISPs) and Account Information Service Providers (AISPs). AISP capabilities could be used for a budgeting app or consumer credit company. PISPs are effectively payments companies. Both access consumer bank accounts directly —letting them deliver their services rapidly.
The diagram below shows how AISPs and PISPs relate to customers, their banks, and the merchants they deal with.
Back to payments. Account-to-account payments settle in seconds, with instant confirmation of funds. Open Banking providers move money directly from one bank account to another, with no other intermediaries. This lets them keep fees lower than other payment methods like cards.
Another advantage of Open Banking payments is the simplicity of the end-customer experience. Making a payment via Open Banking is as simple as receiving a mobile notification, selecting your bank, and confirming the payment with biometrics. See for yourself in this video of a real Open Banking payment.
Bank-based payment methods have already seen widespread adoption in some countries. Germany has SoFort, and iDEAL has become the number one payment method in the Netherlands. PSD2 lets a new class of payment companies make this a reality for customers across Europe.
Open Banking providers can also simplify Know Your Customer (KYC) and Anti Money-Laundering (AML) processes.
Frictionless customer identification via Open Banking
Gambling companies are required to verify customer identities to a high standard. Operators have been paying high fines for failures to comply adequately with regulations. Open Banking can help here, providing a balance between compliance and usability.
Many gaming companies currently ask new customers for a passport scan and a selfie. This process introduces friction for the customer, and became obsolete when Open Banking made Account Information Services (AIS) a possibility.
Account Information Services access customer accounts similarly to the new payments services, providing customer data like their full name and account numbers. As with payments, all the customer has to do is select their bank and confirm the request. Proof of identity via a bank account is an accepted KYC method, as banks conduct their own KYC processes at the point of account creation.
Citizen: one simple integration for Open Banking payments
Citizen makes Open Banking easy; integration is free, and takes around half a day. Citizen offers a full payments product, complete with a refined payment flow for end-customers and an intuitive dashboard for companies.
Citizen also lets you identify customers via their bank accounts; we’re authorised to provide account information as well as payment services. As an Open Banking provider the costs for both of these services are low — we’re the only intermediary you need to deal with.
If you’re interested in getting in touch or learning more about our platform, just head over to the Citizen website.
