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Kristian Sternros

Fintech entrepreneur and chairman of the board. Have founded and managed several companies to significant growth, multiple successful exits.

So, you’ve heard the term “Open Banking” and sure, it offers a payment solution for the future, right? But what is it actually doing, compared to the payment options already available for your business? Join us for a comparison of the most established ways of payment and the Open Banking-way of doing so; Direct payments. In this webinar, our COO Kristian Sternros will break down the different payment options into a few different parts and compare them to each other.

This is a recording of our webinar “Are Direct payments really revolutionizing payments online” that was broadcasted on the 25th of August 2022. If you want to participate live and also get the chance to ask questions in our Q&A subscribe to our newsletter or follow us on LinkedIn. Q&As are not available for non-live viewers.

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Very welcome to the webinar today with Finshark. Where the topic is open banking really revolutionizing online payments. Having said that, I think it's time for me to share my screen and get into the material. I suggest, as a super quick introduction, we have realized that we have so many exciting things to cover today that we decided to totally skip the company introduction, the bragging about the customers, we love them of course. We have decided to skip that part and go straight into the topic of online payment. So, I'm going to share my screen. And there we go. Alright. So, todays item for the webinar is open banking really revolutionizing online payments and we have realized that the best way to talk about it is probably to compare open banking payments, what we call direct payments here on Finshark, with some of the existing and popular payment solutions out there on the market. And to be honest it is a fragment sometimes for a difficult market and landscape to grasp. Lots of different options and lots of different packages and so on. Lots of different solutions both front and the back end. And of course, you always want to make sure that you have the best solution. But what is the best solution? What is most suitable for your type of business? And could that also potentially be changing? So, today we will be comparing 4 different payment methods and just pitching them versus each other. We are pitching cards versus Swish versus invoices versus straight payments. And try to see which will potentially come out on top.  So, we will be scoring each of these 4 solutions on a score 1-5. Where 5 is the best of course, and 1 is the lowest score. Using 6 different key criteria and we will get back to those criteria as we move on to the comparison. But I think this is a great way to approach the landscape, to put these different solutions towards each other. And of course, I just wanted to mention something. We get a lot of questions about, before moving into the comparison.  What about Bankgiro? What about autogiro? That is an existing infrastructure that we get a lot of questions about is if Bankgiro and autogiro is disappearing? Will we not be able to use autogiro to get paid in the future and so on? This is not a webinar about Bankgiro or autogiro, but I thought it would be a good timing to briefly cover it so you know that this is something that we will look more into. The whole Giro infrastructure was created and launched already back in 1959. I mean that's a while ago to say it mildly.

[03:05] Bankgiro and autogiro are about to be transformed in many ways and disappear. Once this Nordic banking project P27 is rolled out, which will probably be next year. So, we believe that Bankgiro, autogiro, everything that has to do with that is not a future solution. Rather you need to look at your succession plan. How will you interact with your customers to get paid once these services are done? That's all we are going to say. 1959 till now, something was coming, and you need to have a plan for it. Alright, moving into the comparison. The first key criteria, super important key criteria, is user- friendliness. And as you can see here, there are a lot of points, a lot of text and we are not going to get into it. To save time and to make sure that we cover the best solutions in each key criteria area, we are only going to talk about the 2 top scores in each criterion. And in this case, you can see that it's Swish and direct payment that, in our eyes, are the top performers when it comes to user-friendliness. And if you want to go into the details download the shares or watch the webinar afterwards. So Swish, talking about user- friendliness. It is a solution that is limited only here to Sweden, of course that created a lot of limitations. Otherwise really perceived as a user- friendly solution. Once you have it installed, of course you need to download the app, you need to configure it, but once you have it installed it's super simple to use. With nice features, such as the calculation, using favourites and the possibility to verify the recipient. Good features. The highest score, 5/5. But then we have direct payments as well. No need for downloads. No need for log in or any information, just “top of mind” information that you only have and only a smartphone. Then you are good to go. It's very versatile. Works in a lot of different channels, pretty much on all digital channels. You can also verify the recipient and have no limitations when it comes to the amount of money you can send. Or, for instance, if you want to use a different account for different payments, so maybe you have one salary account where you add for more normal purchases but then you might have a savings account with more money and you use that for more expensive purchases. You want to make sure that you use the right kind of money without having to go to your internet bank to do transfers and so on. Buy overall, 2 clear high performers in this key criterion. Swish and direct payments. Moving on to the second criteria area. ‘’Settlement speed’’.  And I know that this is an area that many are talking about, many are quite interested in - How quickly will I have my money?  Of course, no wonder about that. It's very intimately linked to both how fast you get paid, but also your cashflow overall.

[06:05] So, important key criteria. Also, as you can see, 2 top performers, both tie in on 5 points each. Its direct payments and Swish. Talking about direct payment we can see that already now that it's instant in many cases, when you use these open banking rails between the banks and your provider, such as Finshark, for instance. The cool thing is that once this P14 pan Nordic banking project goes live, it's going to be an instant transfer both in and out between all these participating Nordic banks. It's going to be a speed of payments that nobody has ever experienced before I would say. So, not only between Swedish banks but also throughout the Nordic region. It's going to be amazing, I would say. Talking about Swish, the runner up, super simple in this case as well. Instant, working well but only here in Sweden. So, I would say 5 maybe with a question mark after it. But 5 still. 2 distinct top performers in this case. Just to mention, perhaps cards as well. Cards have a much slower settlement speed, varying between 2-5 or even more days before you have the money in your bank account. So, it's a significant difference between direct payments, Swish and cards. What about safety then? We read a lot about frauds. We read a lot about different criminal activities regarding payments, skimming cards and all of that. What's going on when it comes to safety? In this case, maybe not a big surprise by now, this is the 3rd key criteria and as you can see, we have 2 distinct winners again. It’s Swish and direct payments. We have both come in on 5 points each, due to some good factors that they carry with them. Both are using strong customer authentication to verify your payment, here in Sweden, that means Bank ID.

[08:13] In other markets there are different strong customer authentication methods, but they work the same way. Making sure that the user is always safe. Pretty much 0 fraud, 0 chargeback and of course you can, before sending the money, also verify that you are sending the money to the right recipient. I think that creates a very good and positive feeling in the send, no matter if it's a consumer or a company representative sending money that you know that this money, this specific amount, now, is being sent to the right recipient.  Very good features built in this technology. When it comes to invoices and cards, let's not get into that. We all know by now that there are a lot of safety issues concerning. Especially cards.  So, irreversibility. That's a tricky word. I'm not sure if I can manage to say that 5 times in a row. That would sound funny. It's about - Is there a risk of my customer cancelling the payment or not, after he/she has made the payment? I know that this is something many merchants, especially ecommerce merchants, worry about. If somebody makes a payment and we process that order, what if we send the shirt or what if we send the shoes? Can the payment for some reason be cancelled? And suddenly, we are out of goods, but we won’t get paid. So how does that work? That is also very cool because as you can see here it's 2 top performers also on this key criteria area. Its direct payments and Swish, both coming in at 5 points each. They are both irreversible. They are both working the way you would want them to work. Open banking payments, what we call here on Finshark direct payments. They are constructed in a way so that they are irreversible.

[10:09] As decided by law and the regulatory technical standards that are a part of the European legislation PSD2. If you are interested in that part or if you would like to read about that, we will gladly provide you with all the reading material and links. I think this is a cool and important fact that you can know that this payment will not get cancelled so you can, with good conscience, process your customer and send your goods. Let them enter your platform. Let them do whatever they want to do so that you are on board and can continue and really provide you and your customer with a good customer experience. I think this is an important key criterion to keep in mind when you are looking at what kind of payment option would be suitable for our needs and our business. Moving on to coverage. This one is a bit different as you can see. All sudden we have cards popping up at the very top taking the 5 in this case. This is where cards really shine. Card is a mature solution. It's been around for a long time. It's really working globally and that means that, as a customer, you can travel pretty much anywhere around the globe and still be able to use your credit card to pay your way forward. But, as a merchant, it also of course means that you can get paid from customers in all different markets. Doesn't matter if your customer is from Japan or from Colombia or from Sweden, Denmark, Norway, or Finland. Cards work pretty much anywhere. They have global coverage, and this is where you can truly see an established and mature payment solution. So, they get the 5 points in this case. I just want to comment on direct payment as the runner up here. Direct payments are still, in many cases, a European issue. The European legislation PSD2, was kind of what created this open banking digital payments movement. It's still a European concern I would say, or European technology. Primarily in the Northern parts of Europe.

[12:24] Then I'm also including the UK, even though they are not a part of the European Union anymore. The more north you come up in Europe or the European Union or the European region, the better open banking is working. Since the banks here are digitalised. The APIs are in place, stable and so on. The further you move to southern Europe, the less mature the markets and the banks are. We can also see that in North America open banking is making quick progress. It's a huge marketing opening but it's not mature enough to be of interest right now. I would say open banking payments are going to be there. It's just a couple years away but so far in this key criterion, if you want to get paid from Japan, maybe investigate credit cards. Otherwise, maybe not. Last key criteria, that is fees. Of course, this is a key criterion that most merchants are interested in. They want to know -How much will this cost me? -How much money can I save? - How much more money do I need to pay potentially? -How is the fee structure? -What am I paying for? -Are there fees for getting started? -Are there fees for every transaction? -Are there fixed fees? Moving fees? A lot of different facades when it comes to this key criterion. We wanted to illustrate the main differences when it comes to fees by just giving you 2 schematic overviews of card payments versus payment initiation that is the open banking digital payments. As you can see here, when you are looking at the card payments, it's not hard to understand why they are quite pricey. There are lots of layers, lots of different moving parts and components and all those components represent an active provider or company and they all want to make money. So, no wonder that it's a bit pricey. Then looking to the right, you can see the schematic overview of an open banking payment. A direct payment. You can pretty much see that it's just a matter of a customer, a merchant and using the customer bank to send money to the merchant, using a provider such as Finshark to facilitate the full process. That’s it. No other middleman. No other dependencies or anything like that. No wonder that the fees are of course much lower.

[14:57] As you can see here at the bottom, cards typically come in somewhere between 1.5 - 3% of the transactional amount. But there are also lots of fixed fees that need to be taken into consideration and those can change between which kind of provider, payment certifier, and such as you are using. Maybe also your bargaining power when it comes to sending the prices. But these are the standardized prices. And Swish, to our experience, comes in 2-3 Swedish crowns for each transaction and comes with some fixed fees as well. Looking at the very bottom, we have direct payments. And, of course, it can also vary depending on the different settings and conditions, etc. But our experience is that direct payments can lower your costs by 50% or even more actually. There is a lot of money to be made. A lot of money to move straight down to the bottom line by switching inter direct payments. And as you can see at the very bottom of the slide here, over to the right, you can see the small table with the scoring as well. We have direct payments coming in at 5 and then we have the other solutions coming in with lower scores as well. Because this is a major difference. I think that looking at the schematic illustrations, you can pretty much tell for yourselves. Why the costs are possible to keep at such lower levels. By now you are probably thinking about the overall score. Who has got on top? Who is the winner in this payment solutions comparison, that we are doing now on august 2022? A bit of digital drum rolls... and here it is. This is the overall score. We have a gold medallist bringing home the big trophy today. And it is direct payments. Of course, you are thinking that we are biased. We are biased. For a good reason, we are working with open banking technology and open banking payments. There are many, many objective reasons why direct payments are such a good payment solution. We are trying to summarize some of these in this slide as well. From an overall score of potentially 30, that is the highest score, you can’t make more points than that. We have direct payments coming in at 28 and the reason for that is its safe, very user friendly, works on all types of digital channels, no limitations on the amounts you can pay, you can switch between different accounts, you can initiate the payments, SMS, emails, apps, websites, etc.

[17:44] The settlement is very quick already now and with P27 it's going to be instant all over the Nordic region. So, a lot of positive things both for the consumer or the cooperation that you have. Because it works pretty much just as good for a consumer as for a company, if you are doing bee2bee or bee2see, it doesn't really matter. It's also good for the merchant. Finally, of course, a lot lower fees. More money left in the wallet, in the bank, for you as a merchant. The runner up, good payment solution here in Sweden. We are happy to coexist with Swish in many different checkouts and so on. Swish coming in at 23. I think Swish is one of those apps, one of those solutions that has made everyday life better for many Swedes. It's a solution that we really enjoy. It has great perks, great functionality but also some obvious limitations. Which makes it a very good solution in many cases but not in other cases as well. I think it's a good runner up. Lots and lots of qualities but not as versatile as direct payments. Then we have cards coming in at number 3. Of course, a mature solution.  I don’t think it's realistic to assume that cards will disappear, but I think it's fair to realize that cards are slowly but surely diminishing. Cards and card providers are not the ones providing innovative new payment solutions. Rather they are trying to find new ways to survive another year. Trying to stay relevant but I don't think this is what's driving innovation anymore. And then, at the 4th place, a payment solution that we haven't really talked about at all. But it's still relevant because a lot of companies are using invoices to get paid, to send billing information to their customers. I believe that the invoice is here to stay but it's becoming digitalized at a high rate. It's becoming enriched with different kinds of digital functions and being used on different channels than before. We will get back to that before the end of this webinar, talking about different use cases. Of how you can keep working with invoices but make your customer happier and get paid quicker.

[20:05] So this is the overall score. Now, moving on to more application related areas. This is something that I believe is super exciting.  We can see that digital payments are moving into the physical offline world as well, at a very high phase. Nowadays, it's possible to have a physical customer, walking into your physical venue. Let’s say that you are a car dealer. You are selling cars. You are selling car parts. You are selling repairs and so on. You can have a customer walking into your daily room, and they want to buy a car, they want to pay for the repairs, they want to pay for the parts, and you can present them by mobile first digital checkout. That you send to them through a SMS, through an email if you want to do that. Maybe a bit strange in a daily room but of course it's fully possible. Through your app or your website. They can access the full mobile checkout in the palm of their hand. Choose the payment option that suits them best. Maybe if they are buying a car, you want to either get them to pay the full amount, maybe that's what you are looking for or maybe you still want to make sure that they take out a credit so that you can make money from this big purchase. You want to provide them with those options as well. Or maybe they are paying for an expensive repair, so they are looking for an opportunity to pay in instalments. Maybe they want to split up that payment in 4 pieces and you can charge a bit higher since you are offering a flexible payment solution. This is something that is moving rapidly into offline payments. The interesting part is that Finshark is providing both payment option 1,2 and 3 in this checkout. Pay the full amount. Pay in instalments or buy now but pay in 30 days. All of this is possible through open banking technology. Now I'm just going to go into a quick demo and try to show you what it will look like if you are a customer making a purchase using direct payments. I think it's good to see the actual flow, and what to expect for the customer when they are making a purchase. As you can see here, I'm a customer.

[22:28] I have decided to buy something for 399 Swedish crowns and I'm at the checkout and I have decided to continue with a direct payment. I'm going ahead and the next step, with the Finshark flow, is that I'm presented with this bank list. I'm a Nordea customer so I should use Nordea. I enter my social security number, verifying myself against Nordea. And then I signed with Bank ID. When accessing Finshark is like accessing Nordea and all my accounts and I can choose which account I want to use to pay these 399 crowns. I decided to use my salary account. I continue. I signed once again using my Bank ID. That’s it. Money on the way. I’m happy. I will receive my goods. Shirt or shoes doesn't matter. And the merchant is getting the money. Maybe even has the money already now, at the very latest tomorrow. But in many cases, as I mentioned before, already now or during the day. Super quick. But this is only the first payment, so all the sub secret payments are what we called ‘’ One touch’’. Because now we have created, or Finshark has created this bank connection. The following payment. Let's say that I get back a while later because I realized that I also need to buy sunglasses. I decided to make another purchase using direct payments. I press continue. Straight away it goes straight to Bank ID. No bank selection. No account selection. Just signed the payment. I'm done. It cannot be done quicker than this in our opinion. This is truly a ‘’One Touch’’ payment. To summarize, now that we are moving into the last part of the webinar, there are some good reasons why merchants, no matter if you are primarily doing online business or offline business, should investigate digital payments. Direct payments specifically. There are good reasons why users like Finshark really enjoy the direct payments. Safe, user-friendly, quick, versatile, pretty much always mobile first. Good reasons why the merchants enjoy these payments as well. Pretty much the same reasons to be honest and of course the lower costs as well. To finish it off, 2 different use- cases. The very first, the e-commerce case. As you can see here displayed with these icons instead, it's the same flow that we presented with the screens recently in the webinar. The customer is presented with payment information. Decides to proceed. Choose the bank. Signs with Bank ID. Choose the account. Signs again and the payment is done. All the subsequent payments don’t matter if it's 10 krona, if it's 10 euros, if it’s 1000 euros or even more doesn't matter. Subsequent payments within this mandate, this bank connection that we have created, and we can hold for 90 days soon to be 180 days, all the sub secret ones are ‘’One Touch’’. Super simple. Super quick for the customers. The next one that I want to mention is this digitized, enriched invoice. We know that there are a lot of companies that are still sending invoices, they are sending them in paper shaped, they are sending them as PDF’s. What you can do now is that you can enrich them.

[25:55] You can put in a QR code so that your customer can scan with a camera and straight away just make the payment. You can enrich them by a clickable link, a clickable button, straight away they are able to pay invoice as well. No need to wait 30 days or anything more. This will convert faster, also make the customer happy because they will straight away be able to handle the invoice without having to enter their internet bank. If you are interested in these user cases, please reach out to us so we can explain and show you more. To round it off today, is open banking really revolutionizing online payments? And I would say the answer is yes. It's still early days when it comes to open banking. It's still something new for many to discover and explore, but if you combine the user-friendliness, the safety, the settlement speed, and the low cost, I think it's truly revolutionizing online payments. That’s it! Thanks for listening today. Thanks for participating. Really enjoyed talking about payments today with all of you.

Thank you very much.

Watch on YouTube
Download slide deck
Webinar speaker

Kristian Sternros

Fintech entrepreneur and chairman of the board. Have founded and managed several companies to significant growth, multiple successful exits.

So, you’ve heard the term “Open Banking” and sure, it offers a payment solution for the future, right? But what is it actually doing, compared to the payment options already available for your business? Join us for a comparison of the most established ways of payment and the Open Banking-way of doing so; Direct payments. In this webinar, our COO Kristian Sternros will break down the different payment options into a few different parts and compare them to each other.

This is a recording of our webinar “Are Direct payments really revolutionizing payments online” that was broadcasted on the 25th of August 2022. If you want to participate live and also get the chance to ask questions in our Q&A subscribe to our newsletter or follow us on LinkedIn. Q&As are not available for non-live viewers.

The Webinar BITE (7 min)

What's a bite? We curate the core message from the webinar and cut it down to an easily digested short clip.

Want to stay in touch and get notified on new webinar shows? Sign up to our monthly newsletter and we will keep you posted!

Transcription

Very welcome to the webinar today with Finshark. Where the topic is open banking really revolutionizing online payments. Having said that, I think it's time for me to share my screen and get into the material. I suggest, as a super quick introduction, we have realized that we have so many exciting things to cover today that we decided to totally skip the company introduction, the bragging about the customers, we love them of course. We have decided to skip that part and go straight into the topic of online payment. So, I'm going to share my screen. And there we go. Alright. So, todays item for the webinar is open banking really revolutionizing online payments and we have realized that the best way to talk about it is probably to compare open banking payments, what we call direct payments here on Finshark, with some of the existing and popular payment solutions out there on the market. And to be honest it is a fragment sometimes for a difficult market and landscape to grasp. Lots of different options and lots of different packages and so on. Lots of different solutions both front and the back end. And of course, you always want to make sure that you have the best solution. But what is the best solution? What is most suitable for your type of business? And could that also potentially be changing? So, today we will be comparing 4 different payment methods and just pitching them versus each other. We are pitching cards versus Swish versus invoices versus straight payments. And try to see which will potentially come out on top.  So, we will be scoring each of these 4 solutions on a score 1-5. Where 5 is the best of course, and 1 is the lowest score. Using 6 different key criteria and we will get back to those criteria as we move on to the comparison. But I think this is a great way to approach the landscape, to put these different solutions towards each other. And of course, I just wanted to mention something. We get a lot of questions about, before moving into the comparison.  What about Bankgiro? What about autogiro? That is an existing infrastructure that we get a lot of questions about is if Bankgiro and autogiro is disappearing? Will we not be able to use autogiro to get paid in the future and so on? This is not a webinar about Bankgiro or autogiro, but I thought it would be a good timing to briefly cover it so you know that this is something that we will look more into. The whole Giro infrastructure was created and launched already back in 1959. I mean that's a while ago to say it mildly.

[03:05] Bankgiro and autogiro are about to be transformed in many ways and disappear. Once this Nordic banking project P27 is rolled out, which will probably be next year. So, we believe that Bankgiro, autogiro, everything that has to do with that is not a future solution. Rather you need to look at your succession plan. How will you interact with your customers to get paid once these services are done? That's all we are going to say. 1959 till now, something was coming, and you need to have a plan for it. Alright, moving into the comparison. The first key criteria, super important key criteria, is user- friendliness. And as you can see here, there are a lot of points, a lot of text and we are not going to get into it. To save time and to make sure that we cover the best solutions in each key criteria area, we are only going to talk about the 2 top scores in each criterion. And in this case, you can see that it's Swish and direct payment that, in our eyes, are the top performers when it comes to user-friendliness. And if you want to go into the details download the shares or watch the webinar afterwards. So Swish, talking about user- friendliness. It is a solution that is limited only here to Sweden, of course that created a lot of limitations. Otherwise really perceived as a user- friendly solution. Once you have it installed, of course you need to download the app, you need to configure it, but once you have it installed it's super simple to use. With nice features, such as the calculation, using favourites and the possibility to verify the recipient. Good features. The highest score, 5/5. But then we have direct payments as well. No need for downloads. No need for log in or any information, just “top of mind” information that you only have and only a smartphone. Then you are good to go. It's very versatile. Works in a lot of different channels, pretty much on all digital channels. You can also verify the recipient and have no limitations when it comes to the amount of money you can send. Or, for instance, if you want to use a different account for different payments, so maybe you have one salary account where you add for more normal purchases but then you might have a savings account with more money and you use that for more expensive purchases. You want to make sure that you use the right kind of money without having to go to your internet bank to do transfers and so on. Buy overall, 2 clear high performers in this key criterion. Swish and direct payments. Moving on to the second criteria area. ‘’Settlement speed’’.  And I know that this is an area that many are talking about, many are quite interested in - How quickly will I have my money?  Of course, no wonder about that. It's very intimately linked to both how fast you get paid, but also your cashflow overall.

[06:05] So, important key criteria. Also, as you can see, 2 top performers, both tie in on 5 points each. Its direct payments and Swish. Talking about direct payment we can see that already now that it's instant in many cases, when you use these open banking rails between the banks and your provider, such as Finshark, for instance. The cool thing is that once this P14 pan Nordic banking project goes live, it's going to be an instant transfer both in and out between all these participating Nordic banks. It's going to be a speed of payments that nobody has ever experienced before I would say. So, not only between Swedish banks but also throughout the Nordic region. It's going to be amazing, I would say. Talking about Swish, the runner up, super simple in this case as well. Instant, working well but only here in Sweden. So, I would say 5 maybe with a question mark after it. But 5 still. 2 distinct top performers in this case. Just to mention, perhaps cards as well. Cards have a much slower settlement speed, varying between 2-5 or even more days before you have the money in your bank account. So, it's a significant difference between direct payments, Swish and cards. What about safety then? We read a lot about frauds. We read a lot about different criminal activities regarding payments, skimming cards and all of that. What's going on when it comes to safety? In this case, maybe not a big surprise by now, this is the 3rd key criteria and as you can see, we have 2 distinct winners again. It’s Swish and direct payments. We have both come in on 5 points each, due to some good factors that they carry with them. Both are using strong customer authentication to verify your payment, here in Sweden, that means Bank ID.

[08:13] In other markets there are different strong customer authentication methods, but they work the same way. Making sure that the user is always safe. Pretty much 0 fraud, 0 chargeback and of course you can, before sending the money, also verify that you are sending the money to the right recipient. I think that creates a very good and positive feeling in the send, no matter if it's a consumer or a company representative sending money that you know that this money, this specific amount, now, is being sent to the right recipient.  Very good features built in this technology. When it comes to invoices and cards, let's not get into that. We all know by now that there are a lot of safety issues concerning. Especially cards.  So, irreversibility. That's a tricky word. I'm not sure if I can manage to say that 5 times in a row. That would sound funny. It's about - Is there a risk of my customer cancelling the payment or not, after he/she has made the payment? I know that this is something many merchants, especially ecommerce merchants, worry about. If somebody makes a payment and we process that order, what if we send the shirt or what if we send the shoes? Can the payment for some reason be cancelled? And suddenly, we are out of goods, but we won’t get paid. So how does that work? That is also very cool because as you can see here it's 2 top performers also on this key criteria area. Its direct payments and Swish, both coming in at 5 points each. They are both irreversible. They are both working the way you would want them to work. Open banking payments, what we call here on Finshark direct payments. They are constructed in a way so that they are irreversible.

[10:09] As decided by law and the regulatory technical standards that are a part of the European legislation PSD2. If you are interested in that part or if you would like to read about that, we will gladly provide you with all the reading material and links. I think this is a cool and important fact that you can know that this payment will not get cancelled so you can, with good conscience, process your customer and send your goods. Let them enter your platform. Let them do whatever they want to do so that you are on board and can continue and really provide you and your customer with a good customer experience. I think this is an important key criterion to keep in mind when you are looking at what kind of payment option would be suitable for our needs and our business. Moving on to coverage. This one is a bit different as you can see. All sudden we have cards popping up at the very top taking the 5 in this case. This is where cards really shine. Card is a mature solution. It's been around for a long time. It's really working globally and that means that, as a customer, you can travel pretty much anywhere around the globe and still be able to use your credit card to pay your way forward. But, as a merchant, it also of course means that you can get paid from customers in all different markets. Doesn't matter if your customer is from Japan or from Colombia or from Sweden, Denmark, Norway, or Finland. Cards work pretty much anywhere. They have global coverage, and this is where you can truly see an established and mature payment solution. So, they get the 5 points in this case. I just want to comment on direct payment as the runner up here. Direct payments are still, in many cases, a European issue. The European legislation PSD2, was kind of what created this open banking digital payments movement. It's still a European concern I would say, or European technology. Primarily in the Northern parts of Europe.

[12:24] Then I'm also including the UK, even though they are not a part of the European Union anymore. The more north you come up in Europe or the European Union or the European region, the better open banking is working. Since the banks here are digitalised. The APIs are in place, stable and so on. The further you move to southern Europe, the less mature the markets and the banks are. We can also see that in North America open banking is making quick progress. It's a huge marketing opening but it's not mature enough to be of interest right now. I would say open banking payments are going to be there. It's just a couple years away but so far in this key criterion, if you want to get paid from Japan, maybe investigate credit cards. Otherwise, maybe not. Last key criteria, that is fees. Of course, this is a key criterion that most merchants are interested in. They want to know -How much will this cost me? -How much money can I save? - How much more money do I need to pay potentially? -How is the fee structure? -What am I paying for? -Are there fees for getting started? -Are there fees for every transaction? -Are there fixed fees? Moving fees? A lot of different facades when it comes to this key criterion. We wanted to illustrate the main differences when it comes to fees by just giving you 2 schematic overviews of card payments versus payment initiation that is the open banking digital payments. As you can see here, when you are looking at the card payments, it's not hard to understand why they are quite pricey. There are lots of layers, lots of different moving parts and components and all those components represent an active provider or company and they all want to make money. So, no wonder that it's a bit pricey. Then looking to the right, you can see the schematic overview of an open banking payment. A direct payment. You can pretty much see that it's just a matter of a customer, a merchant and using the customer bank to send money to the merchant, using a provider such as Finshark to facilitate the full process. That’s it. No other middleman. No other dependencies or anything like that. No wonder that the fees are of course much lower.

[14:57] As you can see here at the bottom, cards typically come in somewhere between 1.5 - 3% of the transactional amount. But there are also lots of fixed fees that need to be taken into consideration and those can change between which kind of provider, payment certifier, and such as you are using. Maybe also your bargaining power when it comes to sending the prices. But these are the standardized prices. And Swish, to our experience, comes in 2-3 Swedish crowns for each transaction and comes with some fixed fees as well. Looking at the very bottom, we have direct payments. And, of course, it can also vary depending on the different settings and conditions, etc. But our experience is that direct payments can lower your costs by 50% or even more actually. There is a lot of money to be made. A lot of money to move straight down to the bottom line by switching inter direct payments. And as you can see at the very bottom of the slide here, over to the right, you can see the small table with the scoring as well. We have direct payments coming in at 5 and then we have the other solutions coming in with lower scores as well. Because this is a major difference. I think that looking at the schematic illustrations, you can pretty much tell for yourselves. Why the costs are possible to keep at such lower levels. By now you are probably thinking about the overall score. Who has got on top? Who is the winner in this payment solutions comparison, that we are doing now on august 2022? A bit of digital drum rolls... and here it is. This is the overall score. We have a gold medallist bringing home the big trophy today. And it is direct payments. Of course, you are thinking that we are biased. We are biased. For a good reason, we are working with open banking technology and open banking payments. There are many, many objective reasons why direct payments are such a good payment solution. We are trying to summarize some of these in this slide as well. From an overall score of potentially 30, that is the highest score, you can’t make more points than that. We have direct payments coming in at 28 and the reason for that is its safe, very user friendly, works on all types of digital channels, no limitations on the amounts you can pay, you can switch between different accounts, you can initiate the payments, SMS, emails, apps, websites, etc.

[17:44] The settlement is very quick already now and with P27 it's going to be instant all over the Nordic region. So, a lot of positive things both for the consumer or the cooperation that you have. Because it works pretty much just as good for a consumer as for a company, if you are doing bee2bee or bee2see, it doesn't really matter. It's also good for the merchant. Finally, of course, a lot lower fees. More money left in the wallet, in the bank, for you as a merchant. The runner up, good payment solution here in Sweden. We are happy to coexist with Swish in many different checkouts and so on. Swish coming in at 23. I think Swish is one of those apps, one of those solutions that has made everyday life better for many Swedes. It's a solution that we really enjoy. It has great perks, great functionality but also some obvious limitations. Which makes it a very good solution in many cases but not in other cases as well. I think it's a good runner up. Lots and lots of qualities but not as versatile as direct payments. Then we have cards coming in at number 3. Of course, a mature solution.  I don’t think it's realistic to assume that cards will disappear, but I think it's fair to realize that cards are slowly but surely diminishing. Cards and card providers are not the ones providing innovative new payment solutions. Rather they are trying to find new ways to survive another year. Trying to stay relevant but I don't think this is what's driving innovation anymore. And then, at the 4th place, a payment solution that we haven't really talked about at all. But it's still relevant because a lot of companies are using invoices to get paid, to send billing information to their customers. I believe that the invoice is here to stay but it's becoming digitalized at a high rate. It's becoming enriched with different kinds of digital functions and being used on different channels than before. We will get back to that before the end of this webinar, talking about different use cases. Of how you can keep working with invoices but make your customer happier and get paid quicker.

[20:05] So this is the overall score. Now, moving on to more application related areas. This is something that I believe is super exciting.  We can see that digital payments are moving into the physical offline world as well, at a very high phase. Nowadays, it's possible to have a physical customer, walking into your physical venue. Let’s say that you are a car dealer. You are selling cars. You are selling car parts. You are selling repairs and so on. You can have a customer walking into your daily room, and they want to buy a car, they want to pay for the repairs, they want to pay for the parts, and you can present them by mobile first digital checkout. That you send to them through a SMS, through an email if you want to do that. Maybe a bit strange in a daily room but of course it's fully possible. Through your app or your website. They can access the full mobile checkout in the palm of their hand. Choose the payment option that suits them best. Maybe if they are buying a car, you want to either get them to pay the full amount, maybe that's what you are looking for or maybe you still want to make sure that they take out a credit so that you can make money from this big purchase. You want to provide them with those options as well. Or maybe they are paying for an expensive repair, so they are looking for an opportunity to pay in instalments. Maybe they want to split up that payment in 4 pieces and you can charge a bit higher since you are offering a flexible payment solution. This is something that is moving rapidly into offline payments. The interesting part is that Finshark is providing both payment option 1,2 and 3 in this checkout. Pay the full amount. Pay in instalments or buy now but pay in 30 days. All of this is possible through open banking technology. Now I'm just going to go into a quick demo and try to show you what it will look like if you are a customer making a purchase using direct payments. I think it's good to see the actual flow, and what to expect for the customer when they are making a purchase. As you can see here, I'm a customer.

[22:28] I have decided to buy something for 399 Swedish crowns and I'm at the checkout and I have decided to continue with a direct payment. I'm going ahead and the next step, with the Finshark flow, is that I'm presented with this bank list. I'm a Nordea customer so I should use Nordea. I enter my social security number, verifying myself against Nordea. And then I signed with Bank ID. When accessing Finshark is like accessing Nordea and all my accounts and I can choose which account I want to use to pay these 399 crowns. I decided to use my salary account. I continue. I signed once again using my Bank ID. That’s it. Money on the way. I’m happy. I will receive my goods. Shirt or shoes doesn't matter. And the merchant is getting the money. Maybe even has the money already now, at the very latest tomorrow. But in many cases, as I mentioned before, already now or during the day. Super quick. But this is only the first payment, so all the sub secret payments are what we called ‘’ One touch’’. Because now we have created, or Finshark has created this bank connection. The following payment. Let's say that I get back a while later because I realized that I also need to buy sunglasses. I decided to make another purchase using direct payments. I press continue. Straight away it goes straight to Bank ID. No bank selection. No account selection. Just signed the payment. I'm done. It cannot be done quicker than this in our opinion. This is truly a ‘’One Touch’’ payment. To summarize, now that we are moving into the last part of the webinar, there are some good reasons why merchants, no matter if you are primarily doing online business or offline business, should investigate digital payments. Direct payments specifically. There are good reasons why users like Finshark really enjoy the direct payments. Safe, user-friendly, quick, versatile, pretty much always mobile first. Good reasons why the merchants enjoy these payments as well. Pretty much the same reasons to be honest and of course the lower costs as well. To finish it off, 2 different use- cases. The very first, the e-commerce case. As you can see here displayed with these icons instead, it's the same flow that we presented with the screens recently in the webinar. The customer is presented with payment information. Decides to proceed. Choose the bank. Signs with Bank ID. Choose the account. Signs again and the payment is done. All the subsequent payments don’t matter if it's 10 krona, if it's 10 euros, if it’s 1000 euros or even more doesn't matter. Subsequent payments within this mandate, this bank connection that we have created, and we can hold for 90 days soon to be 180 days, all the sub secret ones are ‘’One Touch’’. Super simple. Super quick for the customers. The next one that I want to mention is this digitized, enriched invoice. We know that there are a lot of companies that are still sending invoices, they are sending them in paper shaped, they are sending them as PDF’s. What you can do now is that you can enrich them.

[25:55] You can put in a QR code so that your customer can scan with a camera and straight away just make the payment. You can enrich them by a clickable link, a clickable button, straight away they are able to pay invoice as well. No need to wait 30 days or anything more. This will convert faster, also make the customer happy because they will straight away be able to handle the invoice without having to enter their internet bank. If you are interested in these user cases, please reach out to us so we can explain and show you more. To round it off today, is open banking really revolutionizing online payments? And I would say the answer is yes. It's still early days when it comes to open banking. It's still something new for many to discover and explore, but if you combine the user-friendliness, the safety, the settlement speed, and the low cost, I think it's truly revolutionizing online payments. That’s it! Thanks for listening today. Thanks for participating. Really enjoyed talking about payments today with all of you.

Thank you very much.