B2B Payments

FinTech Firms Take The Reins In Open Banking For SMBs

Open Banking continues to explore new B2B use cases. This week, FinTech firms took the reins as they introduced application programming interface (API)-powered solutions for small businesses (SMBs). Experian, VoPay and QuickBooks leaned into the API opportunity via a range of B2B financial services use cases, including small business loan application, online accounting, bank account opening and a solution offering small businesses an alternative to card payment processing. PYMNTS breaks down the latest in B2B Open Banking adoption below.

Experian Leans Into The API

Credit reporting agency Experian announced not one, but two initiatives in the past week in support of direct data connectivity with financial institutions, both with a focus on business banking. The first, announced last week, was the rollout of its Open Data tool, a solution designed for small businesses to automatically provide lenders with business information as they apply for financing.

“The manual, paper-based method of applying for finance is archaic and laborious for both lenders and [SMBs],” said Lisa Fretwell, managing director of data services at Experian, in a statement at the time. “Small business owners are often time-poor, and only get the chance to fill out a funding application in the evenings when many lenders are closed for business.”

Open Data, integrated into Experian’s Commercial Acumen solution, aggregates bank transaction data and other account information, and sends it to a lender within minutes, enabling small businesses to more quickly collect the necessary documentation to apply for financing. The product, Experian said, is made possible via an API partnership with FinTech firm Codat.

Experian’s second API solution, announced earlier this week, reflects the expansion of Open Banking business models into markets beyond Europe and North America. In collaboration with Singapore’s OCBC Bank, Experian is allowing startups to open business bank accounts immediately upon incorporation, rather than requiring newly formed businesses to wait one day after receiving approval from the Singapore Accounting and Corporate Regulatory Authority (ACRA).

Experian’s API connectivity automatically aggregates business data from ACRA and sends it to OCBC, accelerating bank account opening for new businesses in what Christie Chu, OCBC head of emerging business and commercial banking, said is an important solution for startups.

“We are in the best position to strengthen connections among all players in this ecosystem,” Chu stated. “This is what we have done here by streamlining the account opening and incorporation process, so that startups can begin running their businesses as soon as possible.”

VoPay Wields Open APIs For Account-To-Account Transactions

In Canada, meanwhile, payments company VoPay rolled out its newest offering last week, wielding API connectivity to allow for direct account-to-account transactions between small businesses. Pointing to the inefficiencies of traditional card processing for SMB payments, VoPay said in its announcement that account-to-account transactions can lower payment processing costs, improve payment speeds and boost transparency of transactions.

Bank of Montreal is one of the Canadian financial institutions offering the APIs to its own business customers, VoPay said, adding that the solution allows businesses to accept online payments without handling credit cards. It also takes advantage of bank-level data security while validating bank account information at the time of a transaction.

QuickBooks Broadens Open Banking Use Cases

Though Open Banking and API connectivity are often viewed as a model for allowing FinTech firms to gain access to users’ bank account information, the B2B financial services space is increasingly exploring additional ways to adopt the strategy.

One firm is QuickBooks, which recently announced a partnership with U.K. FinTech Revolut. Its B2B offering, Revolut for Business, will use Open Banking APIs to allow U.K.-registered businesses to directly connect their Revolut for Business accounts with Intuit’s QuickBooks Online accounting platform.

This data connectivity will support businesses’ ability to ensure that data within their QuickBooks platforms is up to date for the most accurate visibility into company finances. In their announcement, the companies pointed to greater control of company financial data, as well as instant access to historical business financial data of up to two years. The Open Banking connectivity also supports greater transparency and accuracy of financial information integrated into QuickBooks Online.

“Open APIs with Revolut is just the start of what we’re going to offer [our customers] through Open Banking,” said Shaun Shirazian, Intuit’s director of product management for Europe, in a statement. “With cleaner and more robust banking data, coupled with the AI and machine learning capabilities within our software, we know that small businesses will be so much closer to mastering their company’s cash flow.”


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.