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Whitepaper: 11 Design Principles for Payments in the Age of Open Banking

Icons of the 11 design principles for payments in the age of open banking.

Digital leaders like Apple, Google, and Spotify have shaped consumers’ expectations regarding user experience (UX). Big tech uses sizable teams of psychologists, designers, and engineers to deliver intelligible and even addictive digital experiences. It is no surprise that consumers apply these high standards to the digital offerings of banks and payment providers.

While banks as gatekeepers to bank accounts persistently neglected to adopt these UX standards for their online offerings, FinTechs, and other third parties gradually began to attack this gap through innovative as well as customer-friendly deals. However, this sometimes happened in legal gray areas with corresponding risks for consumers as well as third-party providers.

Nowadays, due to various API-driven open banking initiatives worldwide, and PSD2 in Europe, it is clear that banks are increasingly losing sole sovereignty over the bank account. Customers will no longer be as dependent on the bank’s digital offerings as they used to be. Authorized third parties can now gain direct access to account information and/or payment initiation. As a result, users will have the freedom of choice for the front-end and can access their bank account from their preferred entry channel—be it social media websites, mobile messaging apps, or other points of contact. UX in this context will be more relevant than ever and can be the golden key to retaining the customer touchpoint.

A UX Primer

UX design involves the analysis, creation, and optimization of the user experience. This experience includes a user’s thoughts, emotions, and needs when interacting with a digital product. UX designers aim to improve this experience by reducing the complexity of systems and leading the user to their desired destination as conveniently and quickly as possible.

The right UX strategy for payment providers has to weigh two conflicting main user goals. On the one hand, users want completely smooth payments. In the most extreme form, the entire payment could already be processed by clicking “order now”—no username or password to remember, no forwarding to the payment page, and certainly no TAN process. In reality, this is not yet possible and relates to the second important goal of the user. Payment must be absolutely safe. Strangers may under no circumstances gain access to the holdings of the user. Even just leaking the user’s balance would lead to a trust implosion and the abandonment of a payment service.

Illustrated graphic of the 11 design principles for payments in the age of open banking.

The golden rules for successful payment UX

To assess the overall UX quality of a payment gateway, we have devised eleven simple rules that are partially drawn from proven academic and industry standards such as Nielsen’s heuristics. The goal was to come up with heuristics that are rather broad to both allow the application in different business as well as cultural settings while being specific enough to help management tick boxes when evaluating the UX of a payment service. Though some principles might look trivial at first sight, various real-life examples prove the contrary.

1. Perceived security

Make them feel safe! Most users will not be able to realistically assess the security of a payment method. Therefore make sure to communicate your efforts towards the safety of your users.

2. Visibility of system status

Users should always be informed about what’s going on and what comes next. Only then will the user feel in control which in turn increases perceived security.

3. Consistency and standards

Surprises and confusion have especially no place when it comes to users’ money and confidential data. Keep the payment process consistent and draw on accepted industry standards.

4. Lean data input

Minimize the input of personal data needed and make suggestions for recurring inputs.

5. Effortless authentication

Secure user authentication can be a major hurdle in a payment transaction. It should be mitigated by cutting-edge technology such as artificial intelligence algorithms or voice pattern recognition that can reliably validate a person’s identity.

6. Responsiveness and mobile readiness

Blending of desktop and mobile has arrived and payment methods can only succeed if they are fully available in both worlds.

7. Aesthetic and minimalist design

Less but better. Focus on what is important and present it in a beautiful manner. A professional-looking design will, among other factors, enhance a solutions’ perceived security.

8. Recognition and Diagnosis of Errors

Errors should not occur, but if they do, users should feel confident and informed enough to give it a second try.

9. Notification and documentation

Allow users to get instantly notified about transactions and analyze past transactions.

10. Educate sellers/cashiers

Retail partners ultimately decide how the intended payment process is executed. By working closely with these partners, error rates can be decreased.

11. Gamification

People, in general, don’t like to spend money. However, by integrating elements of Gamification, providers can increase loyalty. Gamification can be anything from rewarding redeemable points to savings challenges in an online bank account.

Embrace the opportunity now.

The importance of UX in payments can hardly be stressed enough. We all know that a lot went wrong in the past, but we also see things changing for the better. Today, invoice payment with only your email address plus zip code exists, and 3-D Secure for credit cards is encountered less and less. It should be clear that the quest for superior UX design is a continuous process that will never be done and dusted for any consumer payment service. De facto, this process picked up speed in recent years due to various technological and regulatory changes. Now, with open banking, banks are well advised to ramp up their own UX activities or form strategic alliances in order to keep the direct customer touchpoint. Payment is synonymous with one of the most precious resources of today’s age: data and user engagement.

Über die Autoren

    Jakob Schniewind

    Headshot of Jakob Schniewind.

    is a strategy consultant at EY Innovalue and expert in the field of digital payment.

    Josef Mayerhofer

    Headshot of Josef Mayerhofer.

    is CEO and business designer at Empatic – User Experience Strategy and lecturer at the Fachhochschule Technikum Wien.

  • Tag: #Design Principles
  • Tag: #Usability Heuristics