Company spotlight: Yolt Technology Services

Jack Tenwick, Head of UK Sales at Yolt Technology Services 

“With the YTS open banking API, your customers can choose to pay directly and instantly from their bank account, eliminating card transfer fees, reducing fraud and payment drop-outs whilst providing a fast, efficient payment process.”

What does your company do?

Yolt Technology Services (YTS) facilitate access to open banking services, including direct bank transfer payments and transactional data fetching via our banking network.

What is your USP and how do you work?

YTS were key to launching open banking in the UK, completing the 1st successful open banking API call and was the first to connect to all major UK banks. Today we support more than 20% of total open banking API traffic a month and are the leading pan-European open banking provider by coverage.

YTS provide bank account connectivity, with client’s consent, to allow retailers and other 3rd parties to support and offer direct, account to account payments (PIS) as an alternative payment method to credit or debit cards. PIS bypasses the need to share credit/debit card information; creating a more efficient and secure checkout journey for the customer. It also supports the instant receipt of funds and can lower transaction fees by up to 90% based on a low, flat, per transaction fee basis. 

What do you see as challenges for retailers and suppliers in the near future?

It’s no surprise that this is an extremely challenging time for  retailers. For many businesses, fallout from the pandemic has left them keen to find fast and effective ways to reduce unnecessary costs such as interchange fees charged by card providers.

The recent news that card fees are to be increased dealt another blow to the millions of retailers in the United Kingdom. Credit and debit card processing fees are set to rise from 0.3 per cent to 1.5 per cent for those EU businesses collecting online payments on UK-issued cards. This move will only add to the cost of doing business with the UK and in turn, is likely to lead to price rises for consumers.

In a recent survey by Yolt Technology Services, nearly half of those surveyed (49%) said that recovering from the crisis was one of their biggest challenges. This was followed closely by reducing transaction costs without compromising services levels, named by 47% of respondents.

Alongside the high card transaction fees, businesses are struggling with incoming funds. Cashflow has long been an issue and the pandemic has caused serious problems industry-wide. While some businesses have been left unable to trade as normal, others have had to suspend operations completely. Hence, making sure cashflow is managed is definitely a challenge. 

How are you using emerging technology to address this issue?

Retailers and other businesses can save a considerable amount of money through the PIS payment functionality, as providers such as YTS, set a flat-fee per-transaction. This can produce savings of up to 90% against credit or debit card processing fees and means the higher the value of sale of a product, the greater the savings for the business.

Furthermore, amidst the aftermath of Brexit we’ve seen credit card companies increasing transaction fees for retailers outside the EU – so the savings are significant. This could be crucial for many smaller businesses at a time when every penny counts. 

Open banking payments are also an immediate solution for retailers to overcome crippling cashflow problems during the pandemic. PIS is built on faster payments which means that businesses using this payments functionality will benefit from instant receipt of funds, unlocking cashflow issues. 

These key benefits are vital considerations after the damage inflicted by the Covid-19 pandemic on businesses across the UK. Open banking payments simplify recurring payments too – a key benefit for markets such as subscription-based retail models, which are expected to be worth more than £1 billion by next year. 

Realising these benefits is about businesses embracing open banking and educating both themselves and their customers as to its value. The increasing uptake of open banking payments across industries is proof that this is happening. In the banking industry, more than half of businesses using open banking are benefitting from these faster payments (51%), whilst in retail it’s two-thirds. 

Steps to implementing account to account payments (PIS) as a retailer? 

Find a suitable open banking API provider to partner with. Here you should be concerned about their bank account coverage and if relevant, wider European coverage, their experience, security standards (can they support you from a regulatory stand-point) and a flexible pricing model to allow you to ’test the water’. YTS are leaders in all of the above.  

The technical steps are as follows… 

1. Connect to the YTS Sandbox which can be found on our developers’ portal https://developer.yolt.com/.  

1. Realistically, they can be coding on the Sandbox in minimum thirteen minutes (our record) but we usually say 1-2 hours for something meaningful. 

1. It takes around 4 weeks to go live for implementation.  

How do the recurring payments work? 

We’ve been working to build and test this functionality which essentially, allows consumers the option to give a single consent on the use of their payment details so they don’t have to authenticate every payment and log into their bank every time. The payment would then be scheduled, automated and a fixed amount.

This functionality allows us to be  more intelligent in terms of when to prompt the payment or set up a recurring payment date; especially now in Covid-times when financial management is more challenging for a lot of people. 

For example, when a consumer is on a payment plan with a retailer we can use our data to work out when the best time to set up recurring payment is e.g. right after payday to avoid the possibility of a failed payment. We can then either set up a recurring payment for that date or prompt you via text or an email.

What are the security credentials?

Introducing a new payments channel is a big task, especially in sectors that may be more hesitant about new technology or confused as to how it works. However, open banking is built on highly secure technology that uses APIs to transmit the data and enable online interactions, providing greater levels of trust, rather than less. PIS is the most secure form of payment as it leverages bank-side authentication (fingerprint, face ID, etc) to approve payments. To add to this, no sensitive credit/debit card information is being shared so retailers can expect a fall in chargebacks arising from payment fraud. 

All open banking activities are regulated, and you need to operate under a regulatory license to perform them. YTS can support 3rd parties as agents under our FCA license or for wider EU, our DNB license in the Netherlands. YTS is a venture of ING Bank N.V. and that ensures that our security standards and approach to risk remain above par and core to our DNA.

Have any of your services been impacted by Brexit? 

Yolt Technology Services is a Pan-European provider with offices in Amsterdam, London and Poland. We’ve got an FCA licence and an EU licence which means we can support customers in the UK and across Europe – making us quite unique. Brexit hasn’t impacted our day-to-day negatively but we’ve seen an uptick in customer approaches because we can support pan-European coverage of open banking and European payments 

What targets are you aiming to achieve in the next five years?

We will continue to build out and retain our leading, pan-European presence and deliver our high quality, easy to use APIs for businesses and their customers to leverage the benefits of open banking. These benefits consist of greater inclusion to financial services and improved customer experience for consumers whilst for business, greater customer acquisition, retention and cost savings.

Functionally, YTS will retain its alignment and consult on the wider developments within open banking (e.g., supporting variable recurring payments) and continue to release enhancements to support payment and data workflows.