Attempts to turn social media into a new payment channel are doomed to be a novelty unless firms outside banking can win consumers’ trust with financial details, according to new research.
Two-thirds of consumers say they would not share their bank account details with a non-bank payments provider such as an online retailer, social media platform or fintech company.
Just one in four would trust third parties to make and schedule transfers for them, raising questions about newcomers’ ability to shake up payments when the rules are loosened throughout Europe next year.
“Open banking has the potential to transform consumers’ relationships with financial products, but it hinges on consumers’ willingness to embrace it,” said Jeremy Light, a managing director at Accenture, which commissioned the research.
“Until new entrants to the financial services sector can earn consumers’ trust, banks can draw on their extensive heritage to secure an important early advantage.”
Fears of fraud, data protection and cyber attacks were among the reasons potential users were reluctant to cut out their bank.
Just over half of all Britons trust their bank overall, and around six in ten respondents would turn solely to their bank for services like a better mortgage or savings rate. One sign of hope for new entrants was that the survey found people born after 1980 were much more likely to trust a non-banking company with their details.
New payment methods such as PayPal, ApplePay and Square have already transformed online and mobile transactions, yet the purchases are typically underpinned by a traditional bank account and card.
The new Payments Service Directive, which comes into force in January, forces banks to open their online plumbing to non-banks who want to offer payments direct to customers.