Can Split open banking save Christmas?

CHRISTMAS is often a time associated with increased financial stress for many Australians. A time of year when household budgets blow out due to presents, special events and summer holidays.

The problem is now amplified with so many different ways to pay – from credit cards and digital wallets to buy-now-pay-later schemes like Afterpay and zipMoney. 

One Australian fintech is using 'open banking' to deliver fairer repayments for people faced with larger than expected bills this holiday season or, in some cases, significant debt.

Split Payments, a Byron-based company which has won accolades in 2019 - including the Australian FinTech Award for Payments Innovation - have created a platform that can eliminate dishonours and deliver a happier path for those struggling to get on top of their bills. 

Kristofer Rogers, Split’s CEO, explained, "By using open banking connectivity, we have created a world-first capability to perform a balance check prior to processing a bank payment. If there are insufficient funds in a customer’s account, we simply notify the merchant and don’t process the payment. This avoids that unhappy path of bank fees for both the customer and the merchant, which is a game changer."

Open banking is a regulatory change being implemented in Australia that requires banks and financial institutions to allow approved third parties to securely access a customer’s transactional data, with their approval, to obtain better financial services. Such a move should level the playing field for financial services providers but also helps technology companies like Split Payments innovate and create unique capabilities. 

Mr. Rogers said, "Without giving away too much of our secret Santa recipe, we have built an enduring consent platform that allows customers to agree to specific terms that allow merchants to perform balance checks and gain a better understanding of spending behavior via machine learning. Ultimately, this technology delivers a fairer outcome. It has also modernised direct debit payments, which were antiquated and not really suitable for the digital economy that we live in today."

Since launching in January 2018, Split Payments has already processed more than 14 million transactions and works with businesses including Australia Post, MoneyMe and illion to deliver new direct debit products.

"We are really proud to sprinkle a little bit of payments magic this Christmas to help Australians doing it tough," Mr Rogers said.