The adoption of open banking could save SME online retailers an estimated £19,000 a month in transaction fee savings, according to a new report.

Research from open banking provider, Yolt, suggested that small online retailers in the UK currently process around 217 sales a day – a figure that increase by 24% if that retailer also has both an online and in-person presence.

On average, retailers pay a transaction fee of approximately 1.8% across all different payment types, with the highest charges found in Buy Now, Pay Later payment methods (3.2%) and debit cards (3%).
 
Taking into account just the most popular payment providers, such as AMEX, Mastercard and Visa, the average small business will spend over £22,000 a month on transaction fees, costing the entire industry an estimated £66bn every year.
 
However, Yolt suggested the adoption of open banking technology could significantly reduce these costs, as it does not utilise commission-based transaction fees, providing lower and more predictable costs to the retailer. This could save the average SME online retailer approximately £19,000 a month.

Yolt CEO, Nicolas Weng Kan, said: “The retail industry has been incredibly hard-hit by the economic challenges of the past few years. Small businesses in this sector in particular are likely still finding their feet and recouping losses.

“Open banking technology can provide solutions which alleviate common financial stressors on these businesses and allow them instead to focus their spending on strategies to improve growth.”

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