#RetailEXPO19: NatWest reduces charges through Open Banking launch

Open Banking legislation is providing an opportunity for the creation of new lower-cost payment methods with NatWest set to launch its own solution shortly

With the advent of the PSD2 Open banking legislation, NatWest is launching a solution that makes it an early entrant into the market with a product that will reduce charges to retailers by 25-50%. 

Adrian Smyth, head of innovation at NatWest, said at the RetailEXPO in London, that the solution - using the account-to-account capability of PDS2 - creates a smooth experience for shoppers when purchasing online.

Initially badged as NatWest Pay when piloted on the Carphone Warehouse website as a alternative payment option, Smyth said the adoption rate reached 46% without any marketing. “People said not to call it NatWest Pay because you don’t have to bank with NatWest to use it so the question is what do we call it. We will launch it soon with the new name,” he said. 

When customers choose this payment option online they then select their own bank and the payment can then be taken. For its success Smyth recognises that it needs to be adopted by the other banks and payment providers, which could be a challenge.

“Merchants don’t want lots of payment options [on their online checkout] and others could compete with us so it’s about who gets to market first, gives the best experience, and the best value,” he suggested.

Open Banking will clearly present opportunities to lots of different players who will undoubtedly join NatWest and offer competitive options to retailers. Among those that Smyth views as competitors are the other traditional banks, fintech companies, the merchants themselves who can set up as payment initiators, the telcos, and the GAFA (Google, Apple, Facebook and Amazon) grouping.