Banks perceive fraud through payment links as heightened threat, study shows

By Puja Sharma

According to new customer data from embedded banking provider, BankiFi, businesses from a wide range of sectors continue to trust payment links such as SMS, email and QR codes when requesting payment on invoices, particularly when the relationship between buyer and sellers is already known. The trend comes despite years of warning from banks about a perceived heightened app fraud risk through payment links.

To mark its attendance at this year’s SIBOS conference, the company has revealed some eye-opening stats accrued following the launch of numerous app-based payment solutions with banks across the UK, including The Co-operative Bank and TSB. The insightful data highlights that businesses across dozens of sectors continue to place considerable faith in the power of text, email and QR codes to chase payments in situations where the buyer and seller know each other personally.

This trend comes despite years of warnings from banks that payments instigated via payment links are inherently risky. As BankiFi’s data shows, customers continue to choose straightforward, simplified solutions when looking to chase up payments in situations where the buyer and seller both know each other. BankiFi’s research shows that customers’ desire to collect money in a fast and easy manner far outweighs any concerns they may have about fraud related to these solutions.

Crucially, the company’s new customer data shows that solutions of this ilk are also supporting SMEs in tough economic times. By choosing alternative payment methods, which don’t require card readers, SMEs are able to receive every penny from sales and can ensure they’re paid more quickly, in-full and without any costly fees. In fact, the company’s data shows that SME owners who send payment requests via one of BankiFi’s app solutions routinely get paid ahead of their invoice’s due date, which is far quicker than usual.

Around the world, small businesses continue to be disproportionately affected by late invoice payments, which can have a big impact on their cash-flow levels. By streamlining the invoice payment process, BankiFi’s technology, branded and promoted by their bank partners are tackling this challenge and allowing business owners to focus their time on core business objectives instead. Clearly, the new data underlines that in challenging economic conditions, businesses are more focused than ever on getting paid.

Speaking on the company’s new customer data announcement, Mark Hartley, Founder and CEO of BankiFi said, “Our customer data highlights that businesses want simple and convenient solutions, particularly when dealing with parties they know on a human-to-human basis. Fraud is still a big issue, but in situations where SMEs know their customers, it’s not as much of a concern. The issue is the same for hundreds of SMEs, from nail technicians to fire walkers – they want to collect their money as fast and easy as possible.

“We’re sharing this information around SIBOS, as its highly relevant to many of the banks in attendance. The data shows that when tailored to an SME audience, SMS-based services and emailcan work as an effective customer acquisition tool, it also shows that the use of face-to-face payments via QR codes are also on the rise. Solutions like this also fit a growing trend of account-to-account payments solutions, which allow SMEs and other businesses to make and receive payments without the need for additional hardware, such as card readers.”

Key highlights:

• Two-thirds of payment requests sent via BankiFi’s apps are paid within just one to two days – often seeing businesses paid well in advance of invoice due dates which is considerably quicker than the global average.
• Over 58% of sellers show a preference to send payment requests via SMS-based services when given the opportunity to do so, and that these SMS-based services have the highest paid rate of 79%.
• Around 72% of unpaid requests are paid when the user reminds their customer using the ‘resend’ function available via BankiFi’s SMS-based services. This convenient option allows customers to avoid chasing payments via phone call, or email.