Tink launches balance check for direct debits

Powered by Open Banking, Tink’s new feature will reportedly simplify the setting up of direct debit mandates, supporting businesses and consumers during economic uncertainty. Balance Check uses real-time account data to give businesses the ability to verify how much a user has in their bank account, for example at pre-purchase to check whether there are sufficient funds, or post-purchase to check for sufficient funds prior to a monthly direct debit collection. Balance Check can be used to fight fraud, minimise failed payments, and protect customers from unnecessary penalty fees and from seeing their credit score negatively impacted, the official press release states.

Balance Check is a key feature of Tink’s Account Check product that allows businesses to confirm the owner of a bank account with real-time data, allowing for a reportedly smoother onboarding process. As the cost of living continues to rise, Balance Check can supposedly help businesses protect revenue, reduce risk, and increase efficiency. According to Tink analysis, payment failures drive up the average cost of direct debit transactions to a UK merchant by 15-20 times. By enabling businesses to validate balance information in a timely manner, it becomes easier to set up a direct debit. Businesses can also increase their collection rate with smarter billing schedules tailored to their users’ income patterns and by giving users advance notice of insufficient funds, decreasing the risk of non-payment, according to the official press release.

Balance Check was launched in the UK, Sweden, France, Germany, Netherlands, and Italy, and will be rolled out more widely across Europe in 2023. According to the Head of Payments and Platforms at Tink insufficient funds is the number one source of failed direct debit payments, ultimately leading to lost revenue and fees for both the business and the consumer. He continued to say that through real-time data used directly from the user’s bank account, Balance Check reportedly protects businesses by reducing the risk of non-payment, while also protecting consumers from missed payments and penalty fees – which will be fundamental as the cost of living rises, the official press release concludes.

Tink’s recent announcements

In regards to product launches, in July 2022, Tink upgraded its payment stack with the launch of settlement accounts, a new feature that aggregates PIS settlement. In August 2022, the Open Banking platform launched its Expense Check, a product designed to simplify the customer affordability verification process for lenders.

When it comes to partnerships, Tink partnered with SlimPay for A2A payments in September 2022. In October 2022, the company partnered with Adyen for Open Banking-powered payments. Also in October, Tink partnered with Snoop to offer customers personalised insights into how they can cut on their bills, grow savings, and pay debt. Last but not least, Tink partnered loan broker Sambla Group to offer lenders access to more accurate affordability assessments.