Posts

Level up your payment processes by automating pay-outs

The administrative effort tied up in processing pay-outs can be a burden for many businesses. Whether accounts payable or the issuing of refunds, paying out in a traditional sense is typically time-intensive and error prone.

In a typical workflow, a user will log in to a business bank account and manually enter a range of different details for each payment. These will be authenticated by another team member before the transactions are authorised.

However, when disbursing payments across multiple recipients, the manual process to facilitate the transactions can get out of control as your business grows. Mistakes, delays and unaccounted figures begin to take up more time as your company scales, reducing overall efficiency

Timely and accurate payments are a crucial driver for customer success, so it is important businesses pay attention to their payment processes and identify areas for improvement. Two in five UK invoices were paid late in 2018, implying there is scope to update payment processes across sectors.

A sophisticated payment workflow will look to automate manual tasks and minimise opportunities for human error. For larger organisations that already use third-party systems to organise supplier payments, a best-in-class solution would see them combining all their disparate databases into one unified payment solution. By integrating with an API for payment automation – such as fire.com’s – the need to route payments through multiple systems for complex payments is greatly reduced.

Examples of automated pay-outs
Whether it’s an inter-account transfer to a segregated customer or staff account, or automating large volume batch payments to suppliers, there are a number of ways APIs can be used to streamline the pay-out process.

Alternative lender – automated, real-time disbursements
GRID Finance is an alternative finance provider that specialises in loans for the hospitality, e-commerce and personal service industries. Being able to release funds to customers quickly is a key differentiator in the alternative lending space, so they looked to fire.com to help them automate payments-out and open segregated customer accounts in real-time, to support effective reconciliation.

As a result, GRID Finance has significantly increased speed of settlement and reduced reconciliation processing times to minutes:

“Every minute we save allows us to focus on delivering the best possible experience for our customers” says Senior Operations Manager of GRID Finance, Gary Grimes.

Bulk pay-outs to suppliers
By opening a fire.com business account and integrating with the API, businesses can initiate vary large volume batch payments to suppliers, contractors or staff. Once the workflow is set-up, users authorise each payment via the firework mobile app.

Bespoke payments providers such as fire.com can also support businesses with less development resource to automate batch pay-outs, with the only requirement being the provision of data in Excel format and the opening of a fire.com business account from which to send the funds. If you think you could benefit from this service, get in touch with our team to find out more.

Shopper debit cards
Buymie is an online retail platform that allows customers to purchase goods from local retail stores and have them delivered same day. Buymie wanted a solution that would enable them to open accounts for each personal shopper and quickly transfer the funds needed to purchase goods for customers. They also wanted the ability to freeze cards themselves, switching each one off once purchases are made.

By opening up an account with fire.com, Buymie can open additional accounts with no further KYC checks. Each account comes with its own IBAN and all inter-account transfers are made in real-time, at no charge. For enhanced security, all account users receive a notification when payments are made, while cards can be frozen or unfrozen instantly via the parent account.

Are you thinking about introducing an automated element to your pay-out process? We can help. Get in touch with our team to discuss the benefits of opening a digital account.

What are Open Payments?

The arrival of Open Banking represents a seismic shift in the way consumers and businesses use financial services. By giving regulated third-parties secure access to financial information, it is shaking up an industry that has been difficult to access – inviting more competition and stimulating innovation.

For consumers, Open Banking is better suited to meeting the needs of our increasingly digital society – offering greater choice and access to highly personalised services. For businesses, it presents the opportunity to create exciting new financial products that are more secure and cost-effective than ever before.

A one click society

Thanks to the rise of mobile apps, voice assistants and streaming media, consumers now expect quick and seamless experiences with every digital interaction. And payments are no exception – indeed, contactless payments accounted for 19% of all payments made in the UK in 2018.

In addition, consumers are increasingly customers of more than one bank or hold multiple accounts and access to accounts via mobile app has become the norm. The result is that everyone now carries a payment device in their pocket.

Account transfers traditionally presented considerable friction for the payer, with account details requiring manual entry. These have been left behind in the one-click revolution. Until now.

One of the new developments arising from Open Banking allows approved payment processors to set up (initiate) an account transfer payment for the payer to authorise in their online banking or mobile app. Termed “Open Payments”, this form of digital payment doesn’t require data entry from the payer, reduces settlement time for the payee and, in some cases, instant reconciliation.

Not only is the experience faster for all parties, it’s also more secure than other payment methods. And, with fewer parties involved in the payment process, Open Payments are also significantly more cost-effective for businesses than traditional debit or credit card payments.

How Open Payments work

Leveraging Open Banking technology, Open Payments allow people and businesses to pay directly from their account, in real-time. It’s safer, faster and more cost-effective than other payment methods available today. Here’s how it works.

The process starts when a payer is prompted to pay using Open Banking. An Open Payment request can take the form of simple web links, so lend themselves well to many payment scenarios. Here are a few examples of how the links can be displayed.

Website button

 

Bus stop shelter

 

Open Banking Payment Terminal

 

The payer’s view

When a customer opts to pay using Open Banking, they are first asked to select their account provider from a list. They authenticate and sign into their account as normal via online banking or mobile app. When logged in, they are presented with the payment details and asked to authorise the payment. The payer is then shown a confirmation of payment before being redirected back to the business they are buying from.

Check out the payer’s view of Open Payments in our explainer video:

 

Find out more about Open Banking payment technology in our white paper: From Open Banking to Open Payments – a better way to pay, and get paid.