the-benefits-of-open-banking-for-italian-e-commerce-businesses

27 Apr

Open banking for e-commerce: what it is, the PSD2 regulations and the benefits for Italian merchants

Q: What does the PSD2 directive entail and what changes for Italian e-commerce businesses?

PSD2 (Payment Services Directive 2) is the European directive that has made open banking possible and regulated it. Transposed into Italian law by Legislative Decree 218/2017 and subsequent provisions of the Bank of Italy, it stipulates that banks are obliged to open their APIs to authorised third parties (such as PISPs), guaranteeing users the right to access their funds through any regulated payment service, not just their own bank.For an Italian merchant running an e-commerce business, PSD2 has introduced two concrete changes.

Open banking allows an e-commerce business to collect payments directly from the customer’s bank account, without going through credit cards, PayPal or other intermediaries. The transfer takes place in real time, the fee is fixed and much lower than with traditional methods, and the money arrives in the merchant’s account within seconds.

For an Italian B2B e-commerce business handling high-value recurring orders, orders based on quotes, or customers with trade credit, open banking is not a futuristic option: it is already available, regulated by the European PSD2 directive, and already integrated into various payment platforms operating in Italy, such as our Cuborio.

What is open banking and how does it differ from PayPal or Stripe?

Open banking is a payment system that uses banking APIs to allow authorised third parties — known as PISPs (Payment Initiation Service Providers) — to initiate a payment directly from a user’s bank account, with their explicit consent, without their bank details ever being shared with the merchant.

In practice, it works like this: the customer reaches the checkout of your e-commerce site, selects ‘Pay with open banking’, is redirected to their bank (or the banking app on their phone), authorises the payment using their bank credentials or biometric authentication, and the money is transferred immediately to the merchant’s account. No credit card, no PayPal account, no intermediary holding the funds for days.

Compared to PayPal: PayPal is a digital wallet that acts as an intermediary between the buyer and the merchant. Funds pass through PayPal accounts and may be held in the event of a dispute. Open banking is a direct bank transfer: funds arrive in the merchant’s account without any intermediate stops and without a third party being able to block them unilaterally.

Compared to Stripe (credit cards): Stripe and card gateways typically charge percentage-based fees of between 1.5% and 2.9% plus a fixed fee per transaction, as well as holding funds for one or more working days before crediting them. Open banking has much lower fixed fees (often under 50 pence per transaction, regardless of the amount) and immediate settlement.

Compared to traditional bank transfers: a standard SEPA transfer takes 1–2 working days. Open banking via SEPA Instant Credit Transfer takes less than 10 seconds, 24 hours a day, 7 days a week, including public holidays.

According to data from the Bank of Italy, in 2024 open banking transactions in Italy exceeded 45 million, representing a 78% increase on the previous year. The market is still in a phase of rapid growth, which means that those who adopt it today are building a competitive advantage over competitors who are waiting.

What does the PSD2 directive entail and what changes for Italian e-commerce businesses?

PSD2 (Payment Services Directive 2) is the European directive that has made open banking possible and regulated it. Transposed into Italian law by Legislative Decree 218/2017 and subsequent provisions of the Bank of Italy, it stipulates that banks are obliged to open their APIs to authorised third parties (such as PISPs), guaranteeing users the right to access their funds through any regulated payment service, not just their own bank.

For an Italian merchant running an e-commerce business, PSD2 has introduced two concrete changes.

The Strong Customer Authentication (SCA) requirement

From September 2021, PSD2 requires that every online payment be authenticated using at least two of the following factors: something the customer knows (password, PIN), something they possess (smartphone, token), or something they are (fingerprint, facial recognition). This has made 3D Secure mandatory for card payments and has increased checkout abandonment rates — one of the main reasons why many Italian merchants are considering alternatives.

Open banking natively meets the SCA requirement: bank authentication using biometrics or a PIN satisfies the Strong Customer Authentication requirements without adding extra steps for the customer. In many scenarios, checkout via open banking is perceived as smoother than checkout with a card + 3D Secure.

The right to access banking APIs

PSD2 requires banks to provide standardised APIs to third parties authorised by the Bank of Italy. This has created the technical and regulatory infrastructure on which the entire open banking ecosystem is based. In Italy, all the major banks (Intesa Sanpaolo, UniCredit, Banco BPM, BPER, Crédit Agricole and over 200 smaller institutions) have implemented the APIs required by the directive, making open banking accessible to the vast majority of Italian account holders.

It should be noted that PSD2 does not make open banking mandatory for merchants: no e-commerce business is obliged to accept it. It is a commercial choice that depends on the customer profile and the type of transactions handled. That said, ignoring it in 2026 means missing out on a real opportunity to reduce transaction costs and improve liquidity.

What are the benefits of open banking for SMEs selling online in Italy?

The benefits of open banking for an Italian e-commerce business are tangible and measurable, not theoretical. The most significant ones for an SME relate to transaction costs, payment processing times and security.

Reduction in transaction costs

This is the most immediate benefit. Credit card fees average between 1.5% and 2.9% of the transaction value, plus a fixed fee per transaction. For a B2B e-commerce business processing €500,000 worth of orders per month, this amounts to between €7,500 and €14,500 in monthly fees for payment costs alone.

Open banking operates on a fixed-fee basis, typically between 20 and 50 cents per transaction, regardless of the amount. For high-value B2B transactions (orders of €1,000, €5,000, €10,000), the savings compared to a credit card are proportional to the amount and can be very significant.

Immediate liquidity

With credit cards, funds are typically credited to the merchant’s account with a delay of 1–3 working days, after the gateway has carried out its checks. With open banking and SEPA Instant, funds are in the merchant’s account in under 10 seconds, even on Saturdays, Sundays and public holidays.

For a high-volume e-commerce business, having immediate liquidity rather than waiting 2–3 days can make a real difference to working capital management, especially during peak periods such as Black Friday, Christmas or promotional campaigns.

Elimination of fraudulent chargebacks

A chargeback is the mechanism by which a customer disputes a credit card payment and requests a refund from their bank. The merchant is automatically refunded and must prove that the transaction was legitimate — a lengthy and costly process. In sectors with a high risk of fraud, chargebacks can account for 1–3% of turnover.

With open banking, chargebacks do not exist. The payment is authorised directly by the user via their bank using strong authentication: once authorised, it cannot be disputed as fraudulent. Disputes are handled directly between the merchant and the customer, without the involvement of the card-issuing bank.

Suitable for high-value B2B orders

Credit cards have spending limits that make it difficult to use them for large B2B orders. A wholesaler ordering €8,000 worth of goods from their supplier cannot pay by card — corporate credit limits rarely cover this type of transaction. Open banking has no card-related spending limits: the limit is simply the available balance in the customer’s bank account.

To learn more about how to optimise the entire payment experience and boost checkout conversions, the guide on how to increase revenue by optimising the payment experience offers strategies you can implement immediately.

How is open banking technically integrated into an existing e-commerce site?

Open banking is integrated into an e-commerce site via the APIs of a PISP — a Payment Initiation Service Provider authorised by the Bank of Italy. The PISP acts as a bridge between your e-commerce site and the banking APIs of your customers’ banks.

The technical flow of an open banking payment in an e-commerce platform is as follows. The customer selects ‘Pay with open banking’ from the available payment methods. They select their bank from the list of supported banks, which in Italy cover over 95% of account holders. They are redirected to their bank’s interface (web or mobile app) and log in using their bank credentials. They view the payment details (amount, beneficiary, reference) and confirm. The bank notifies the PISP of the successful authorisation, the PISP notifies your e-commerce platform that the payment has been authorised, and the SEPA Instant transfer arrives in the merchant’s account in under 10 seconds.

From the merchant’s perspective, integration involves adding the payment method to the checkout, configuring the destination IBAN for payments, and integrating webhook notifications to update order statuses in real time.

To learn more about how the digital payments ecosystem works and which trends are emerging, the article on the future of e-commerce payments amid innovations and trends offers an up-to-date overview of the sector.

Cuborio assistance: how can we help you?

Cuborio natively integrates open banking via FlowPay®, an Italian solution authorised by the Bank of Italy as a PISP. No custom integration is required: the payment method is already available on the platform and can be enabled during project configuration.

Discover the Cuborio and FlowPay integration

Is open banking suitable for all e-commerce businesses, or only in certain scenarios?

Open banking is not the right solution for every e-commerce business. There are scenarios where it offers concrete and immediate benefits, and scenarios where traditional payment methods remain more suitable.

Scenarios where open banking works best

B2B e-commerce with high-value orders: this is the ideal use case. Orders of €500, €2,000 or €10,000 paid via open banking eliminate percentage-based card fees, prevent chargebacks and guarantee immediate liquidity. The ROI of the integration can be measured as early as the first month.

Recurring orders and subscriptions: open banking supports recurring payments via delegated consent mechanisms, where the customer authorises once and subsequent payments take place automatically. This is particularly useful for B2B e-commerce with recurring supply contracts.

Customers with trade credit: for B2B customers granted credit terms (30/60-day payment), open banking simplifies reconciliation: the transfer reference automatically identifies the relevant order, reducing administrative work.

High-risk chargeback sectors: online fashion, electronics, marketplaces — sectors where fraudulent chargebacks are frequent benefit directly from the elimination of this risk that open banking guarantees.

Scenarios where other methods remain more suitable

Low-value B2C impulse purchases: for a purchase of €20–30 on a consumer e-commerce site, credit cards or PayPal remain the preferred method for the majority of Italian consumers, who are not yet familiar with open banking for everyday purchases.

Customers unaccustomed to advanced digital payments: open banking requires the customer’s bank to support PSD2 APIs and for the customer to be able to authenticate themselves via their bank’s app or web portal. For a segment of less digitally savvy customers, this can present a barrier.

The best approach for most Italian e-commerce businesses is to complement — not replace — traditional methods: offering open banking as a payment option alongside cards and PayPal allows more tech-savvy customers to use it, without penalising those who prefer established methods.

To understand how to integrate multiple payment methods seamlessly, the article on integrating PayPal and Stripe into an e-commerce site offers a practical comparison of the available options.

How does open banking work for B2B subscriptions and recurring payments?

One of the most interesting uses of open banking for B2B e-commerce is the management of recurring payments. There are two mechanisms available: Variable Recurring Payments (VRP) and invoice payment via link.

Variable Recurring Payments (VRP)

VRPs are an extension of open banking that allows periodic payments of varying amounts to be initiated from a bank account, with the account holder’s prior consent. The customer authorises the arrangement once, setting the mandate parameters (maximum amount per transaction, frequency, duration), and from that point onwards payments are initiated automatically without the need for further authentication.

For a B2B e-commerce business with customers who reorder varying quantities of goods each month, VRPs are the ideal solution: they eliminate the need to send payment links with every order and drastically reduce the time between order and payment.

Payment by invoice via link

The merchant issues the invoice, the customer receives a payment link, clicks on it, authenticates with their bank, and the payment is processed instantly. Compared to a traditional SEPA bank transfer, invoice payment via open banking links eliminates IBAN input errors, ensures funds are available within seconds rather than 1–2 days, and generates an automatic notification to the e-commerce system as soon as the payment is authorised — no need for manual checking of bank statements.

Cuborio natively manages B2B subscriptions and recurring orders: customers can authorise recurring payments directly through their bank, with automatic notifications and integrated account reconciliation.

Find out how to manage subscriptions and recurring payments on Cuborio

Frequently asked questions about open banking for e-commerce

Open banking is a payment system that allows money to be transferred directly from the customer’s bank account to the merchant’s account, without intermediaries such as PayPal or credit cards. It is based on the open banking APIs introduced by the European PSD2 directive, which requires banks to allow authorised third parties (PISPs) to initiate payments on behalf of account holders. Unlike PayPal — which is a wallet that holds funds — and Stripe — which processes card payments with commission rates of 1.5–2.9% — open banking has much lower fixed fees (typically under 50 cents per transaction) and immediate settlement via SEPA Instant, regardless of the transaction amount.

PSD2 does not oblige merchants to accept open banking as a payment method: it is a free commercial choice. What PSD2 does make mandatory for merchants accepting cards online is Strong Customer Authentication (SCA): every payment must be authenticated using at least two verification factors, as required by the 3D Secure protocol. PSD2, on the other hand, regulates entities offering payment services (banks, PISPs, AISPs): these must be authorised by the Bank of Italy and comply with specific technical and security requirements. An e-commerce business wishing to accept payments via open banking does not need to obtain any authorisation: it simply integrates the APIs of an already authorised PISP, such as FlowPay® in the case of Cuborio.

There are three main benefits for an Italian SME. First, reduced transaction costs: the fixed fees for open banking are much lower than the percentage-based fees for credit cards, with savings becoming significant on high-value B2B transactions. Second, immediate liquidity: with SEPA Instant, funds reach the merchant’s account in under 10 seconds, 24/7, eliminating the 1–3 day delays associated with card gateways. Third, elimination of chargeback risk: open banking payments cannot be disputed as fraudulent by the card issuer, reducing to zero one of the most difficult losses to prevent in e-commerce.

Integration takes place via the APIs of a PISP (Payment Initiation Service Provider) authorised by the Bank of Italy. The merchant does not need to interact directly with the banks: the PISP acts as an intermediary, manages redirects to the banking interfaces and notifies the merchant of the payment outcome via webhooks. From a development perspective, the integration is comparable to that of any other payment gateway: you configure the webhook reception endpoint, add the method to the checkout, and test the flow in a staging environment. On Cuborio, integration with FlowPay® is native and requires no custom development.

Yes, and it is precisely in this scenario that it offers the most significant advantages. Unlike credit cards — which often have corporate spending limits insufficient for B2B orders worth thousands of euros — open banking has no card-related limits: the limit is the available balance in the customer’s bank account. For a B2B e-commerce business with average orders exceeding €500, the savings on fees compared to cards are immediately noticeable. Variable Recurring Payments (VRP) mechanisms also allow you to manage recurring orders of varying amounts with the customer’s pre-authorisation, eliminating the need to re-enter payment details for every order.

27 Apr

Open banking for e-commerce: what it is, the PSD2 regulations and the benefits for Italian merchants

What is open banking and how does it differ from PayPal or Stripe?

What does the PSD2 directive entail and what changes for Italian e-commerce businesses?