Last editedJul 20234 min read
Open banking and Instant Bank Pay
If you run an organisation and process payments in the UK, you may have heard about something called open banking. Despite the UK’s position as one of the world’s leading open banking innovators, many businesses remain unaware of how popular open banking is. In a recent poll by GoCardless, we asked 100 businesses how widespread they thought the adoption of open banking was, and only 11% believed that over six million consumers and businesses had adopted open banking. In fact, four million consumers and businesses have now adopted open banking as a way to pay for goods and services and there has been 400% growth in open banking adoption in the last year alone
In short, growth is increasing but open banking faces an awareness challenge. That is why we are passionate about getting the word out through webinars and content that help explain the value of Instant Bank Pay (which is powered by open banking), what it can do for your business, and how easy it is to get started.
We recently ran the webinar ‘Getting started with Instant Bank Pay’ which had one of our expert solutions engineers, Amir Shahmiri explaining how simple it is to incorporate Instant Bank Pay into your existing payments strategy. If you haven’t seen it yet you can watch it on-demand here. We loved hearing everyone’s questions and in order to help more people benefit from using open banking, we wanted to share some of our top insights and top answers with you here, so you can join the thousands of other GoCardless businesses who’ve already adopted Instant Bank Pay.
Benefits of Instant Bank Pay
Instant Bank Pay vs Credit Cards
Do you know your checkout conversion rate for online credit card payments?
Do you see a lot of potential customers abandon ship when they discover they need to go hunting for their credit card and manually enter 16 digits? Forget about asking your customers to dig out small pieces of plastic and manually enter long credit card numbers, only to then get sent through an extra security check. With Instant Bank Pay, your customers fill out a few details and we automatically connect them to their bank to verify payment. In just a few taps, the payment is complete.
Do you know what your fees are for credit card payments?
Instant Bank Pay transaction fees are on average 54% cheaper than credit cards, and we don’t charge high-value transaction fees and for many customers fees are capped at £4 on our Standard pricing plan. That means instead of paying £15 (3%) on a £500 transaction, we’d charge you £4 — almost ¼ the fee you’d pay to a card company.
Instant Bank pay vs manual bank transfer
Are manual bank transfers truly free?
While a manual bank transfer might look like an appealing option for your business, they come with unseen headaches and admin time. One of our invoicing businesses, for example, was spending 14 hours per week, per team, on reconciliation for manual bank transfers from their customers. They recently switched all of their invoices over to Instant Bank Pay, which allows them to provide customers with a link when a payment is due, which when clicked pre-populates the payment with all the data its finance team needs to quickly identify it in their accounts. And because transactions move directly from account-to-account, funds are transferred faster and payment is confirmed instantly.
Instant Bank Pay & Direct Debit
How can I use Instant Bank Bank Pay with Direct Debit? We are so glad you asked! First, do either of the following sound familiar?
“I like offering direct debit for my recurring payments, but I don’t like having to wait 3-5 days for the new mandate to be set-up.”
“I want to use direct debit for the first payment of a subscription or installment, but I can’t because I need to take the first payment instantly.”
Instant Bank Pay works right alongside direct debit for the first payment, which means you don’t have to send your customers through two different payment flows when they sign-up to your business. You can now take the first payment instantly and set up a new customer mandate all in one, single and seamless checkout experience. You can add it straight to your website, and manage everything from the GoCardless dashboard, the API, or from a connected partner application.
We built Instant Bank Pay with three pillars of privacy and security in mind:
Protecting your account information
Protecting your data
Protecting your funds
When your customer enters their bank’s login credentials, they do so from within their bank’s native environment, whether that’s on their website or in their mobile app. The bank uses Strong Customer Authentication (SCA) to identify the customer, which adds an extra layer of security to the login process and safeguards your account. As a third party, GoCardless will never ask a customer to provide us with your bank’s login credentials.
Money transferred through Instant Bank Pay is done so automatically via GoCardless’ direct connection with banks, which ensures the security of each transaction. Consumers should also know that FCA rules hold that banks have to treat a breach of your bank account via a third-party provider as though it were a breach of the bank itself. As a result, you’ll have the same level of protection as you would with a normal bank transaction.
By connecting you directly to your bank, we’re able to better safeguard your information and login credentials. We’re required to keep some of your personal data to meet our legal and regulatory obligations, but when we do so, we follow a strict privacy framework. And ultimately, Instant Bank Pay gives you final approval over what payments are made. If there’s an error, there are existing dispute resolution processes in place to help you recover your funds.
If you’d like to read more about how we ensure privacy and security, check out this article.
If you use GoCardless on a Standard, Advanced, or Pro plan, Instant Bank Pay transactions are priced exactly like your domestic bank debit pricing. See our full list of plans and pricing here. If you have a custom pricing agreement, please get in touch with us at email@example.com or reach out to your Customer Success Manager.
In case you’re wondering…
Are there high-value transaction fees for Instant Bank Pay?
No. If you are on a Standard, Advanced, or Pro plan, there are no additional fees. We also offer custom pricing for larger businesses.
What are the maximum transaction limits for Instant Bank Pay?
The maximum transaction limit is £25,000, however, lower limits may also be set by your customer’s bank.
How do I use Instant Bank Pay through my partner application, and what kind of support do you offer?
In order to use Instant Bank Pay or the Billing Requests API, your partner will need to have built the integration. Once the feature has been integrated, you should see the feature in your partner's platform. If your partner has not built the integration yet, please register your interest in the feature here.
Countries and Currencies
Currently, Instant Bank Pay is available for your customers based in the UK and Germany. As a merchant, you can access the feature if you're based in the UK, US, EEA, and Australia. If you have any questions about access - please contact us at firstname.lastname@example.org.
If this wasn’t enough content for you, and you’re craving more — you’re in luck. We have lots more information on Instant Bank Pay and open banking available in our resources hub, on our website, and a live demo inviting you to try Instant Bank Pay by making a donation to our charity partner, the Trussell Trust.