Innovation in payments drives real impact for the Hardware Sector

Hardware stores and builders’ providers have long relied on cash or cheque on delivery, but there have always been risks associated with these methods of payment. Drivers are delivering valuable goods, and there is the risk of these goods being accepted without payment completion. The most common alternative has been to take advance payment by card over the phone. However, collecting sensitive information in this manner carries another set of risks – non-compliance with GDPR, PSD2 & card scheme rules, data breaches, and fraud & chargebacks.

To overcome these barriers and create opportunities for business growth, the need for greater technological investment is paramount. The Open Banking initiative is transforming the way organisations across all sectors, including hardware, request and collect payments. It empowers businesses to build user-driven services on the foundation of transparency, automation, and secure & seamless account-to-account payments. One of the fastest growing paytechs in Ireland – Prommt – is helping hardware vendors seamlessly collect payments using secure, branded payment requests as an alternative to costly card transactions and risky card details taken
over the phone.

An efficient payment alternative for high-value transactions Dublin-based Prommt enables merchants to effi ciently request and collect payment through card and bank transfer using merchant-branded, secure payment requests, and today help over 250 businesses drive revenue by reducing card fraud & chargebacks, minimising payment administration and enhancing customers’ remote buying experience.

Prommt has enjoyed significant success within the hardware sector across Ireland and the UK, with many of these customers including Bradfords, Robert Price, MGN Builders, Howarth Timber and Kew Electrical now utilising their latest Pay by Bank capability (Open Banking payments). Using this feature, customers authenticate and approve a bank payment directly from their mobile banking app into the merchant business account in four easy clicks. Pay by Bank reduces card transaction costs and is a perfect alternative to clunky and time-consuming manual bank transfers.

With the customer’s consent, recurring payments can be initiated for building materials from the customer’s bank account on a continuous basis. Customers enjoy the convenience of not having to navigate the authentication process each time, and merchants benefit from shorter settlement times without any chargebacks. Further, it is often the case that the person placing the order with the hardware provider is not the authorised payer, these digital payment requests can easily and safely be forwarded to authorised payers who may be based at a different location.

Since its launch six months ago, Prommt is seeing interesting insights from the hardware sector. Payer adoption for Pay by Bank has not been as challenging as expected by the industry, and Prommt is noticing that Open Banking payments are quickly replacing traditional bank transfers and higher-value remote card payments. The average transaction size through Pay by Bank is nearly double than through Pay by Card. Pay by Bank is propelling cumbersome bank transfers into Open Banking transactions.

How Open Banking is innovating payments

1. Strong Customer Authentication (SCA) eliminates the risk of chargebacks
   Customers are redirected to their bank’s app for biometric authentication after confirming a purchase. There is no built-in chargeback mechanism – customers cannot dispute Open Banking payments, as it the Open Banking payment provider that executes the bank transfer on the customer’s request.
2. Sensitive customer data is not shared with the merchant, eliminating the risk of fraud
   The only details transmitted are payment instructions – sent securely to the customer’s bank rather than the merchant. The risk of fraud and unauthorised transactions is minimised.
3. Facilitates faster settlement of funds
   While card payments and traditional bank transfers can take up to several days, Open Banking payments allow merchants to get paid in minutes.
4. No card processing fees
   Merchants can significantly save on high card processing fees, especially for bulk orders.
5. Operational efficiency
   Pay by Bank enables seamless invoice payments – straight from the invoice through a 3D Secure link. This saves staff’s time spent on administrative tasks involved in collecting payments, allowing businesses to scale efficiently.
6. Positive customer experience
   Open Banking payments eliminate the need for tedious data entry, enabling merchants to provide frictionless and mobile-first customer experiences.

Open Banking generates real impact

• Get paid before delivery
• Increase revenue and profitability
• Eliminate costly chargebacks
• Ensure compliance with regulations (PSD2, GDPR, PCI)
• Payment flexibility – merchants can decide to offer card or bank as a payment method depending on customer, value threshold, or simply offer both options.
• Deliver an enhanced payment experience
• Automated credit control – effectively manage arrears and personal payment plans
• Effective use of staff’s time in collecting payments

Donal McGuinness
CEO, Prommt

If you’d like to learn more, Prommt is an enterprise grade solution that is built for teams, supporting multiple locations, reporting, and alerting capabilities. Get in touch with Prommt at
sales@prommt.com.

This Business Support article featured in the January/February 2023 issue of The Hardware Journal.