NatWest has used the Open Banking framework to create a new cardless payment service for online shopping. Called Payit, the service is a bit like PayPal: money comes directly from your bank account rather than via your credit or debit card, and you don't have to be a customer of NatWest to use it to make instant payments to participating shops.
Customers of the UK's nine biggest banks are all able to use the new service: you just choose Payit at checkout and select your bank. That takes you to your own banking service to complete the payment, which goes out directly from your account.
If you're wondering why this matters, there are a few upsides: companies don't get your financial info, you don't have to create an account or type in card details when shopping, merchants don't have to pay card processing fees and you can stop using PayPal, which many people have had major problems with.
The savings on transaction fees are a big deal for retailers, with NatWest saying a company will save a minimum of 25 per cent on the average £80 transaction compared to processing someone's credit or debit card. Visa and MasterCard make a mint off these fees (they were the reason shops used to charge a card fee, before that was outlawed) so it's not surprising fintech companies are looking for a way around them.
The public sector has already been persuaded by the potential savings: the Crown Commercial Service, which helps public sector organisations get the most value from services, has signed up to Payit.
NatWest CEO of Commercial Banking Paul Thwaite comments:
"As the largest supporter of UK businesses, we are thrilled to launch Payit by NatWest, allowing mid to larger businesses with an online presence to accept payments directly from their customers’ bank accounts in near real time, providing them with an effortless and safe payment experience.
We are especially pleased to have used Open Banking technology to achieve this, allowing customers of the UK’s main banks to use this new payment option."
Currently, the service can't handle refunds, but that's being rolled out in the next few weeks according to TechRadar.
All images: NatWest