The new offering allows merchants to engage with instant, one-off bank-to-bank payments, while still benefiting from recurring payments.
Hiroki Takeuchi, Co-Founder and CEO of GoCardless commented: “We’ve specialised in bank-to-bank payments for over 10 years, with bank debit as the primary payment method. And while it provides many advantages to consumers and businesses, speed of payment authorisation is a drawback.
“Instant Bank Pay addresses this by giving merchants the best of both worlds: open banking will provide instant confirmation of payment authorisation, enabling them to have immediate visibility of their one-off payments, and bank debit will continue to offer the cash flow, cost and retention benefits they have come to expect.”
The announcement marks the first milestone in GoCardless’ journey to accelerate its open banking strategy, for which it received $95m in funding at the end of 2020. With the introduction of Instant Bank Pay, GoCardless will expand its offering into the adjacent e-commerce market, where it can take on both one-off and ‘card-on-file’ payments.
Takeuchi added: “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 instalments. 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.”
Broadband provider Cuckoo used Instant Bank Pay as part of an early access programme to collect first and ad hoc payments for new and existing customers. During the pilot, two-thirds (66 per cent) of customers who experienced a failed payment were able to benefit from using Instant Bank Pay. Of those, 86 per cent were able to make a payment within 48 hours, minimising disruption to their service.
Alexander Fitzgerald, Founder and CEO at Cuckoo, added: “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 bill.
“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, it’ll also help reduce the time we spend chasing late payments and the risk of costs outstanding.”