GoCardless, a fintech platform dedicated to bank-to-bank payments has rolled Instant Bank Pay, which will be integrated directly into its global payment platform, and functional across all payment models.
Instant Bank Pay allows merchants to take instant bank-to-bank payments from new or existing customers and can still keep the benefits of bank debit for recurring payments.
This marks the first milestone in GoCardless’s journey to increase its open banking strategy. By combining open banking technology with its existing global bank debit network, GoCardless provides its 60,000 merchants a new low-cost, seamless, and convenient way of collecting instant payments that work for any revenue model.
Hiroki Takeuchi, co-founder, and CEO at GoCardless said, “We’ve specialized bank-to-bank payments for over 10 years, with bank debit as the primary payment method. While it provides many advantages to consumers and businesses, the speed of payment authorization is a drawback”.
Instant Bank Pay leverages GoCardless’ global bank debit network and open banking technology
Instant Bank Pay gives merchants the best of both worlds. Its open banking gives instant confirmation of payment authorization, enabling them to have immediate visibility of their one-off payments, while bank debit will continue to offer the cash flow, cost, and retention benefits they have come to expect.
With the introduction of Instant Pay, the company will expand its offering into the adjacent e-Commerce market, where it can easily take on both one-off and card-on-file payments.
Takeuchi said, “By enabling businesses to take any kind of payment through GoCardless, we can challenge the dominance of cards and move beyond collecting subscriptions, invoices, and installments. “The launch of this open banking feature means we can now serve any merchant, regardless of whether they have an ongoing or one-off relationship with their customers.”
The new feature can be used for many cases but Instant Bank Pay mainly addresses revenue businesses. According to GoCardless research, 85% of merchants with this business model have a need for collecting additional one-off payments, such as the first payment for setting up a bank debit.
Bank debit is not a suitable option for one-off payments, because it cannot offer instant payment authorization so many merchants switched to card payments that often come with high fees or time-consuming manual bank transfers. Instant Bank Pay is a fast and effective way for customers to make a one-off account-to-account payment. Its instant confirmation provides better visibility of payments, eliminating costly credit card fees and reduces late payments.
The broadband provider company Cuckoo utilized Instant Bank Pay as part of an early access programme to collect first payments from new and existing customers. It said two-thirds of customers (66%) who experienced a failed payment were able to benefit from using Instant Bank Pay. Of those, (86%) were able to make a payment within 48 hours, minimizing disruption to their service. Before this new service, the process of chasing and collecting a failed payment could take 21 days, but now, Cuckoo reduced this to just seven days.
Alexander Fitzgerald, founder, and CEO at Cuckoo said, “We're taking on a broken broadband industry with simple pricing, fair contracts, and exceptional service. The payment process plays a vital role in our mission and working with GoCardless means our customers have a seamless payment experience when switching to us and paying their monthly bills”.
“We’re excited to continue using Instant Bank Pay for one-off payments. Not only will it prevent our customers from losing access to our services, but it will also help reduce the time we spend chasing late-payments and the risk of costs outstanding,” he added.
Merchants can have a low-cost, seamless and convenient way of collecting instant payments from customers
Merchants can build the Instant Bank Pay option straight into their checkout flow or can simply send a payment request with a link to pay. Just like every mobile wallet payment, payers are seamlessly connected to their bank and can authorize payment directly from their bank account in just a few clicks.
Open banking is still a fairly new concept for Americans, with over half of them saying they have “no clue” what it is. This GoCardless strategy will help solve some consumer issues with banking, including the use of multiple payment platforms and update payment details on multiple interfaces.