GoCardless launches Open Banking payments

With Instant Bank Pay, merchants can take instant, one-off bank-to-bank payments from new and existing customers while still benefiting from bank debit for their recurring payments. The announcement marks the first milestone in GoCardless’ journey to accelerate its Open Banking strategy, for which it received USD 95 million in funding at the end of 2020. By combining Open Banking technology with its existing global bank debit network, GoCardless can offer its 60,000 merchants a new way to collect instant payments that works for any revenue model.

With the introduction of Instant Bank Pay, GoCardless will expand its offering into the adjacent ecommerce market, where it can take on both one-off and ‘card-on-file’ payments. While it can be used in many scenarios, Instant Bank Pay addresses an issue that is particularly acute for recurring revenue businesses: according to research from GoCardless, 85% of merchants with this business model have a need for collecting additional one-off payments. Examples include making a first payment when setting up a bank debit (e.g., signing up for a gym membership), purchasing additional goods or services, or topping up an account outside of a customer’s regular payment schedule. 

Bank debit is not suitable for one-off payments because it doesn’t provide instant visibility of payment authorisation. This has forced many merchants to turn to card payments, often with high fees attached, or time-consuming manual bank transfers. Instant Bank Pay is a way for customers to make a one-off account-to-account payment. Instant confirmation provides better visibility of payments, eliminates costly credit card fees, and reduces late payments.