London fintech Agitate latest to unveil open banking-powered payments solution
Agitate, a London-based fintech start-up, has launched its open banking-powered payments solution called “Bopp” which skips the card ecosystem entirely.
The company is the latest in a series of fintech start-ups taking open banking from data aggregation to payment initiation (PI).
All these PI solutions skip the card ecosystems because they initiate transactions directly from a customer’s bank account.
£9bn in savings
No card schemes mean cutting transaction fees, something which will likely see an uptick in adoption of PI systems by merchants which are keen to free up revenue where they can.
Instead, Bopp costs merchants a flat £10 a month. Particularly for larger merchants, this would mean huge savings.
Currently, the majority of UK merchants accept card payments, and as such have to pay part of each customer transaction to the likes of Visa or Mastercard.
Transaction fees sit between 1% and 3%. Debit cards take a much smaller slice than credit cards, which require higher fees to afford cashback for customers.
“If you take an average card processors fees of 1.5%, this means UK businesses spent over £11 billion in fees,” says Ian Gass, Agitate’s CEO.
“If Bopp was used, the fees would save over £9 billion a year.”
Bopp’s payment solution is a link which can be sent via SMS, WhatsApp, or email, or in the form of a QR code.
The payment request link takes a user to Bopp’s website, where it connects to a recipient’s online banking app. The payer then authorises the payment with their bank.
The platform is designed for transactions on behalf of both consumers and businesses. NHS Charities Together is one of Bopp’s first customers.
“Every time a merchant uses Bopp, they save money, reduce fraud, and get cash in the bank immediately,” says Gass.
According to Statista, annual fraud losses on UK-issued debit and credit cards reached £620.6 million in 2019.
The need for “immediacy” arises from the risk cards can introduce for a delayed payment. The standard wait time for a card payment delay is three-to-five days.