ENABLING DIGITAL – AND INSTANT – PAYMENTS TO PROVIDE SEAMLESS EXPERIENCES

Next June 30th, Jacques Pütz, CEO of LUXHUB, will take the stage at ICT Spring. As one of the main speakers of the Fintech-themed conference, he will focus on the newest digital payments solutions that are now available in the fast-emerging Open Banking era. Today, he discusses the new needs of consumers and companies, as well as the advantages of account-to-account payment solutions, and finally shares some of the most concrete PIS (Payment Initiation Services) use-cases.


The current context of profound digital transformation as well as recent and unforeseen events such as the Covid-19 pandemic are impacting the way people behave, consume…and pay. “We see an unprecedented demand for innovation and digital products, with today’s generation always looking for accessible, embedded and easy-to-use solutions. To retain their existing customers and attract others, companies need to reinvent themselves, from their business model(s) and products to the added value they bring and the experience they offer,” starts Jacques Pütz.
As explained, payment is no exception: digital solutions are flourishing as the overall number of transactions keeps on growing. Providing innovative solutions has therefore become crucial for companies that want to keep surfing the digital wave. Additionally, the European Commission recently reaffirmed its ambition to turn the EU into a leader in the payments industry by pushing for initiatives building up on PSD2 momentum, such as instant payments.

Payment Initiation Services: a central pillar of Open Banking
The LUXHUB journey started with a focus on compliance products, seen as the cornerstone of Open Banking, that are now enabling the financial services industry, as well as non-regulated entities to transform and/or offer innovative services through unique and seamless experiences, for the benefit of their end-customers. “The ambition was always to provide deeper innovations and notably to enable all companies, whether they be regulated or not, to enter the world of Open Banking, and leverage its limitless potential”, adds the CEO of LUXHUB.
In fact, the shift from “regulated” to “non-regulated” was only made possible through the acquisition of AISP (Account Information Service Provider) and PISP (Payment Initiation Service Provider) licenses from local regulator CSSF. They give the opportunity to all companies, regardless of the sector they evolve in, to benefit from flexible and secure account aggregation and digital payments solutions.
“It enables companies/public institutions/administrations to directly embed actual finance solutions within their own applications and websites: eventually, they are offering new experiences to their customers, who are more than ever in demand for innovative, trusted and flawless digital solutions,” highlights the CEO of the Fintech.

A new generation of digital payments
Since acquiring the licenses and with its ONE products family, LUXHUB aims at offering frictionless, digital, and account-to-account payment services that have the potential to shake the industry, giving corporations and consumers efficient alternatives, cutting ties with traditional payment methods.
This new type of payments notably allows the rollout of instant payments, and therefore removes settlement and pay-out lag time. Security being a key enabler of innovative financial services, users are redirected to their bank, and through SCA (Strong Customer Authentication), will enjoy a seamless experience, in line with all security standards.
“Moreover, using such Payment Initiation Services also gives companies, for instance online merchants, access to more customers: according to the World Bank Global Financial Inclusion Report 2017, surprisingly, only 46% of over 15, in Europe, own a credit card when over 95% of them have a bank account,” underlines the CEO.
Finally, PIS aims at reducing transaction fees by 40 to 60%, compared to card payments. As no intermediaries are involved in the payment process, fees are transparent, low and do not consist of any additional costs, i.e. for failed payments.
As highlighted by Jacques Pütz, “in concrete terms, by leveraging this service, PSUs (Payment Service Users), whether they be individuals or corporates, can initiate payments directly from their bank account – giving their permission and approving the transaction, but without the need to use a credit or debit card”.

A myriad of use-cases
The secure, fast and cheaper Payment Initiation Services therefore apply to many use cases, answering to the needs of consumers (flexibility and transparency, notably) as well as companies (benefiting from lower fees and providing seamless experiences to differentiate from the competition).
“The purpose of PIS and more generally of Open Banking is to redefine the way people consume and use banking services: facilitating the life of end-users while giving efficient alternatives to companies from any industry. From supplier invoice payments and e-commerce transactions to invoice payment requests, the potential of these innovative services is limitless,” concludes Jacques Pütz.

Share this: