One-Tap Payment Switch Gives Banks the Edge in Account Primacy

Paying bills and managing subscriptions are mainstays of financial life — even a daily task, for many consumers. However, updating payment methods has traditionally been riddled with pain points and friction. For merchants and other providers, a hitch in the process translates into a loss of revenues and even customer loyalty.

Prashant Shah, VP of product management at Galileo Financial Technologies, challenged the PYMNTS audience to remember a recent bill paying experience where updating a subscription meant having to chase down Netflix or Amazon — even the local power company — to log into each individual site to update payment details.

That assumed, of course, that you’d be able to remember the passwords to get into the account in the first place.

In May, the company debuted Galileo Payment Method Switch, which — through a single point of contact — is geared toward streamlining bill payments and making it easier for people to update their default payment method (such as debit cards, credit cards and bank accounts) across merchants, subscription services, utility providers and digital wallets like Venmo or PayPal. Client firms embed the Method Switch into their apps, which keeps the issued cards or accounts, and payments, tethered to their own brands.

Top of Mind, Top of Wallet

The pain points are directly addressed by the switch, Shah said, adding that the product surfaces “thousands of merchants, subscriptions, utility providers and wallets right inside your banks’ or FinTechs’ apps.” The one-time software development kit (SDK), he said, means that Galileo’s clients preload their card to the “top” of holders’ payment stacks, “and within a few tabs, the customers can update all of their payment details, keeping the card top of wallet and driving customer loyalty.”

There’s another positive ripple effect, said Shah, which comes in the form of avoiding disputes, which can occur when a consumer does not recognize a charge on their statement. “Our clients can promote financial responsibility by ensuring that subscription payments are within one banking app and that one statement to see all your monthly subscriptions, utility power payments and so forth,” he said.

Mechanics of the Switch

Galileo is bringing the Switch product to market in partnership with Atomic, which offers the merchant connectivity, with access to thousands of subscription services, digital wallets and recurring billing platforms. On Galileo’s part, said Shah, “We integrate this network from Atomic into our real-time payments engine, where there’s one SDK that our clients integrate into their user’s experience.”

From there, he said, clients surface the payment methods into Android or iOS environments. The solution, he added, is also PCI compliant, which means that the client firms do not “touch” sensitive data, which is in fact housed within a Galileo/Atomic layer.

“In this way our clients can access and provide frictionless information while powering recurring spend on their app,” said Shah.

Fostering Account Primacy

By making the management of everyday expenses and preferred payments easier, Shah said the Switch helps gives rise to account primacy, where the bank or FinTech apps prove so essential to the consumer that the holder uses those apps for all of their financial activities, cementing the financial services provider as a go-to institution, from routine transactions to critical financial decisions in a subscription economy that’s estimated in the trillions of dollars.

Atomic, he said, reports that users switch an average of three to five payments on their first visit, linking around $420 in recurring monthly spend on their new card. “Each successful update locks in that interchange [revenue],” he said, that directly boosts Galileo clients’ bottom lines.

The payment management switch also links with Galileo’s Direct Deposit Switch that enables clients to allow their customers to bring money in to their bank accounts while the payment methods switch enables the payout flows, creating a spending loop.

“The more you are able to retain the consumer or customer within your own experience and help them complete end-to-end financial journeys within your app, they stay there, they grow their loyalty to your app, they become dependent on your app, and they use it to make more responsible financial decisions,” he told PYMNTS.