Since February 2017, the “banking mobility assistance” service, strengthened by the Macron Act, has made it quicker, easier and cheaper to change banks.
This is an interesting point to consider as a merchant in the context of your SEPA Direct Debits.
Consumers wishing to change banks can take advantage of banking mobility, whereby the new bank takes care of the move and, on their behalf and with a mandate, completes all the formalities involved in changing the bank details for regular transactions (credit transfers, utility bills, social security benefits, etc.).
Since this scheme was strengthened, merchant sites have been required to manage changes of bank more frequently, having to update recurring payment data for direct debits.
A few years after banking mobility came into force, this article looks at the feedback from merchants: is this new scheme an advantage for recurring payments or more of a disadvantage?
And, as a preferred partner, how has their PSP supported the operation of this new service for private individuals?
Banking mobility: Why? How?
Consumers considering changing banks have two options for the transition phase:
- Opt for Banking Mobility Assistance: the new bank will take care of all the administrative formalities with the original bank, including the transfer of accounts, direct debits and automatic credit transfers linked to the current account;
- Choose to manage the process themselves: in this case, customers ask their original bank to send the credit transfer and direct debit transactions to their new bank. Then, it is up to them to provide their new bank details to the organisations carrying out these transactions on their old account. This will enable them to register the change of establishment.
Here, we highlight two points to watch out for with this new service:
As mentioned on the website of the Ministry of the Economy, Finance and Industrial and Digital Sovereignty of France: “Although this is generally referred to as an “account transfer”, this is not entirely accurate. In fact, only recurring payment transactions (direct debits and credit transfers) are transferred. The accounts as such are not transferred.”
In addition, banking mobility only concerns deposit and payment accounts (or current accounts).
The table below sets out bank account transfer procedures and any costs involved:
(Source: Economie.gouv.fr, 2022)
This shows that other savings accounts such as Livret A, LDDS (Livret de développement durable et solidaire), Livret Jeune and life insurance policies are excluded from the banking mobility assistance service.
PEL, LEP and CEL accounts, as well as securities accounts and PEAs, are transferable, subject to certain conditions.
In practice, when customers opt for banking mobility, they authorise their new bank, via a mandate, to take care of all the necessary formalities.
The new bank contacts the original bank to obtain a list of all regular direct debits and credit transfers on the account over the last 13 months, as well as a list of cheques issued over the same period but not yet debited.
Banking mobility: What are the benefits for merchants?
Banking mobility, reinforced by the Macron Act, offers a significant benefit to merchants in the context of recurring payments:
→ It promotes a better customer experience.
If the merchant has integrated automation of changes due to banking mobility into its recurring payment process, customers will not experience any problems when they change bank.
Dissatisfaction and poor customer experience can result if the consumer’s decision to change banks is not followed up for their usual direct debits from their service providers.
As a merchant, you should provide your customers with a payment management system that keeps pace with changes in your customers’ banking arrangements.
To make the task easier, it is in the merchant’s interest to automate these changes so that this advantage does not turn into a whole host of disadvantages: customer dissatisfaction or even loss of customers, processing costs, internal resources costs, etc.
To automate the changes inherent in their customers’ banking mobility, merchants should either bring this process in-house or outsource it to a specialist PSP such as SlimPay, for example.
Banking mobility: What are the disadvantages?
While banking mobility offers a major advantage, it also presents challenges for online merchants.
→ First and foremost, one of the main disadvantages is the interruption of recurring payments.
When a customer changes bank, direct debits linked to the old account may be interrupted.
This can disrupt the cash flow of merchants who manage these regular payments, thus affecting their financial stability.
→ In addition, banking mobility can complicate the customer experience.
Customers have to update their payment details on merchant sites when they change bank, which can be a tedious process.
This friction can lead to cart abandonment and customer frustration, reducing conversion rates and impacting merchant sales.
→ Another major disadvantage is the cost of updating payment systems.
Merchants need to invest in modifying their systems to adapt to customers’ new bank details when they change banks.
Adaptation costs can be substantial, particularly for small companies, resulting in additional financial pressure.
→ Lastly, banking mobility can increase the risk of fraud.
Frequent changes to bank accounts can be exploited by malicious actors to carry out fraudulent transactions.
These disadvantages require adaptive strategies and investment to minimise their impact on the sales operations of merchant sites.
One strategy, and not the worst, is to use a reliable PSP.
Banking mobility: how does it work at SlimPay?
As a creditor payment institution, SlimPay is fully conversant with the banking mobility process.
It is connected to the SEPAmail Aigue-Marine interbank messaging system, enabling it to receive banking mobility messages from the new banks of merchants’ customers.
Through use of this system, consumers’ mandates are updated automatically and SlimPay generates all new direct debit requests using their new bank details.
(Source: SlimPay support)
With this easy update, merchant sites benefit from an optimised conversion rate and secure future income from subscriptions and other revenue streams.
It also ensures clear communication between the merchant and its consumers when the new bank details are taken into account.
Customers also have the advantage of fewer administrative formalities to take care of when changing bank and, above all, no break in service due to a possible missed payment.
Banking mobility can thus be a disadvantage for merchants with recurring payments, as it can lead to service interruptions when customers change banks, requiring bank details to be constantly updated.
Support from a reliable PSP is essential for merchants to make the most of banking portability.
