ITP, or Inciador de Transações Pagamentos, is one of Open Finance’s most promising features. Here is how it works and how it will enhance the shopping experience.
The translation for Iniciador de Transações de Pagamento is Payment Transaction Initiator. The idea of ITP is to accelerate the payment journey; as it happens with credit cards, PIX wants to be more practical.
In case you don’t know, PIX has an instant payment confirmation mechanism; however, to complete a transaction using PIX, the shopper must leave the checkout page and login to their banking app to confirm the payment. A four-step process inside the banking app.
We all know that the more steps in the process, the lower the chances of converting a sale. ITP will allow shoppers to make payments or perform other financial operations without having to confirm the transaction by logging into their banking app.
This way, payment gateways for applications like WhatsApp, for example, can connect to a consumer’s bank account with due authorization and security and complete the transaction.
It is similar to the process of logging in to a website using your Facebook account. ITP-licensed payment gateways will have your information tokenized; once on the check-out, it will be a one-click confirmation.
Increasingly, consumers have demanded fluid, agile, and transparent payment journeys. This ultimately leads to higher conversion rates for merchants.
The idea is to reduce the PIX journey from seven steps to four.
1. Choose PIX at checkout; 2. Confirm that the information is correct before initiating the ITP authorization; 3. Once the user authorizes ITP, they will be redirected to a payment confirmation page; 4. Use a password, face ID, or fingerprint to confirm the transaction.
The financial institution, or PSP, must be a member of Open Finance and have the Central Bank’s approval to act as a transaction initiator in order to offer ITP.
For comparison, ITP is equivalent to an A2A transaction, but instead of it being P2P, it’s the shopper’s money going into a merchant’s bank account instantly.
ITP will reduce costs, reduce fraud, improve the buying experience, and be as safe but faster than 3DS 2.0.
