New streamlined authentication journey makes open banking payments even faster
Shortening payment journeys by up to 50% is now a reality. We’re rolling out new logic that cuts the number of authentication steps in some countries and scenarios. Here’s a breakdown of how Tink supports a seamless authentication UX for your customers.
Strong Customer Authentication (SCA) is applied twice to payments in some countries, increasing friction for end users in a payment flow
Tink’s logic now cuts the number of authentication steps where possible, which can shorten payment journeys for user-friendly experiences, while helping businesses boost conversion
Once set up, a simpler authentication journey for Pay by Bank empowers both businesses and consumers while meeting regulatory requirements.
For many apps and service providers, building a loyal user base is essential to business strategy. When it comes to payments, making the journey fast and easy can help increase conversion rates while also building loyalty among users. But with many banks across Europe – including banks in Sweden, Germany and Italy – requiring two sets of authentication across digital payment flows, users now experience additional friction at the point of payment. That’s because in some countries, users need to authenticate twice when making an open banking payment: once to retrieve the account details for the payment and once for the initiation of the payment itself.
The team at Tink has built new logic that reduces the number of steps in a payment for returning users. Now, on their first use of the Tink payment flow, your customers can connect their account for a specified period of time (usually 180 days), making the journey shorter for subsequent payments by skipping the account selection and associated authentication steps. This sets the scene for faster payments and a more instantaneous, convenient experience.
How does this help you and your customers?
Higher conversion rates: with a 10% increase in conversion seen on average so far,* an optimised payment journey can help deliver meaningful revenue uplift
Faster checkout: taking a 38 second average down to 19 seconds during rollout in Sweden,** returning users can pay twice as fast with a click-through payment flow
Reduced friction: reducing the number of authentication steps means a smooth experience and happier users
Increased user loyalty: added convenience helps build customer preference and stickiness.
Optimising Pay by Bank payment flows
Over the last decade, changes in payment regulations have resulted in more friction for users when making payments online or in app with the aim of making payments more secure. But with added authentication requirements, we’ve seen the online payment user experience take a turn for the worse.
While all open banking payments are subject to two-step authentication, different interpretations and implementations across the region have meant many banks have restricted the information that can be accessed during authentication, resulting in more steps in the journey and more friction and frustration for users.
That’s where Tink comes in. Optimising the Pay by Bank payment flow through secure open banking connections is part of why we’re here. After all, payments need to work for the consumer first and foremost.
How is it delivered?
As mentioned above, in some countries, Strong Customer Authentication (SCA), which requires two-factor authentication, is applied twice in the payment flow: once to retrieve the account details for the payment and once for the initiation of the payment itself. Although this can remove manual data entry and reduces errors, it also increases the number of steps for a user when making a payment. This means that conversion rates and user experiences are not as good as they could be and improvements to this flow can directly impact revenue.
Tink provides an elegant solution: as part of the first SCA, the user can grant consent for Tink to provide account information services, which means that during a consent period of 180 days, subsequent payments would not require two SCAs – but one. So payments are just as secure and compliant with regulations, but are now more user friendly.
Where will it be available?
Most banks in countries such as the UK, France, and the Netherlands offer APIs where both account and payment data requests are covered by applying two-factor authentication only once. But there are many countries where two-factor authentication is applied twice, adding additional steps to the user experience. This optimised flow is currently live in Sweden, Germany and Italy. Contact us if you would like details regarding availability in other markets.
Which businesses benefit?
A short, simple payment journey is great news for any business. We think it will be especially beneficial for customers with a regularly returning user base making non-recurring payments, such as:
Finance and investment platforms – let investors get money to market easily with instant payments
Bill and invoice payments – reduce admin to make paying bills easier
iGaming – players can pay faster with a smooth payment experience
The possibilities are endless. Making payments work well for users makes them work well for businesses – why not yours?
Read the docs to learn more
For information about this feature and how to integrate, see our docs.
If you're interested in how to optimise your payment journey or want to learn about how open banking tools can help you get ahead, feel free to get in touch.
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*Customer conversion statistics seen after the first three months of rollout in Sweden.
**Improvement seen during the first three months of solution rollout in Sweden.
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