Date Published : 30th June 2023

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In the rapidly evolving world of financial technology, Open Banking has emerged as a game-changer, offering businesses a more efficient and streamlined way to handle payments. Many times, when we offer a prospect our Open Banking payments solution, a common objection response is, "We have bank transfers in place, why do we need this?"

So, what are the advantages of Open Banking against traditional bank transfers? Let's delve deep into this topic.

Understanding Open Banking

Open Banking fundamentally changes the way businesses handle payments. Instead of waiting for the client to initiate a payment, companies can enter the client's banking sort code and account number into their system and send a Payment Request. This request can be executed in real-time over various communication channels such as phone , email, SMS, WhatsApp, live webchat, or even social media.

This approach opens up more channels to accept payments, facilitating quicker payments and increasing sales closure rates within your sales procedure.

The Pitfalls of Traditional Bank Transfers

In contrast, traditional bank transfers put the client in control of the payment process. They need to enter your bank account details and go through the often laborious process of setting up an account before they can send you a payment. Moreover, if the payment amount exceeds £1000, it may take hours, or even longer, to get approval before the payment is made. This traditional approach lacks the flexibility to facilitate payments during conversations with clients.

For instance, when chasing late payments, you can't simply call your client and request a payment while you're on the phone or in person. There's a significant delay involved, which can stretch from days to weeks or even months. Open Banking, on the other hand, offers a clear advantage by enabling faster and more efficient payments.

The Appeal of Open Banking for Businesses

For businesses, getting paid faster and gaining control over the payment process is undeniably attractive. We've all heard horror stories about sending payments to the wrong bank account due to incorrect details. With Open Banking, you are in control, eliminating such concerns and providing certainty and confidence to both you and your clients. Additionally, Open Banking simplifies the process for clients, eliminating the need for them to set up an account.

Furthermore, Open Banking offers the bonus of setting up direct debit payments, allowing clients to easily opt into regular payment plans with just a few clicks. This not only benefits your clients but also streamlines your revenue collection process.

Streamlining Reconciliation with Open Banking

Reconciliation is another significant advantage of Open Banking. It seamlessly matches payments to corresponding orders, saving you the time and effort of manually matching payments with invoices. This is especially valuable for businesses, as corporate time has a substantial cost associated with it. Therefore, Open Banking provides a significant value-add in this regard.

Continuous Improvement with Open Banking

In conclusion, even if you believe your current payment system, relying solely on bank transfers, is adequate, there is always room for improvement. The integration of Open Banking with Gala Technology SOTpay + gateway now allows you to offer both card payments and bank transfers within a single payment request system.

In the ever-evolving landscape of financial technology, Open Banking is a vital tool that empowers businesses to streamline their payment processes, gain control, and provide a seamless experience to their clients. So, are you ready to embrace SOTpay with Open Banking? The answer lies in your ability to adapt and optimise your payment processing methods.

Frequently Asked Questions (FAQs)

1. What is Open Banking? Open Banking is a financial technology innovation that allows businesses to initiate payments directly from their clients' bank accounts, providing greater control and efficiency in the payment process.

2. How does Open Banking differ from traditional bank transfers? Open Banking enables businesses to request and receive payments in real-time through various communication channels, whereas traditional bank transfers require clients to set up accounts and often involve delays.

3. What are the advantages of Open Banking for businesses? Open Banking offers faster payments, greater control over the payment process, reduced chances of payment errors, and simplified reconciliation, all of which are highly beneficial for businesses.

4. Can clients set up direct debit payments with Open Banking? Yes, Open Banking allows clients to set up direct debit payments easily, streamlining recurring payment plans.

5. Is there room for improvement in my current payment processing system? Yes, even if your current system works well, integrating Open Banking can further enhance your payment processing efficiency and client experience.

Incorporating Open Banking into your payment strategy could be the key to unlocking efficiency and success in the modern business landscape. Don't miss out on the opportunities it presents!