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GOCARDLESS LAUNCHES OPEN BANKING PAYMENTS, OFFERING BUSINESSES A NEW ALTERNATIVE TO TAKING ONE-OFF PAYMENTS

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  • ‘Instant Bank Pay’ leverages the unique combination of the GoCardless global bank debit network and open banking technology
  • The feature provides merchants a low-cost, seamless and convenient way to collect instant payments from new and existing customers through a single platform
  • This launch enables GoCardless to challenge the dominance of cards for one-off payments

 

GoCardless, a leading fintech for bank-to-bank payments, has today launched Instant Bank Pay, a new open banking feature directly integrated into its global payment platform. With Instant Bank Pay, merchants can take instant, one-off bank-to-bank payments from new and existing customers while still reaping the benefits of 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 $95m 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 low-cost, seamless and convenient way to collect instant payments that works for any revenue model.

“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,” said Hiroki Takeuchi, co-founder and CEO of GoCardless. “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.”

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.”

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 per cent 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 fast and easy 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 thanks to a seamless payer journey.

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. Furthermore, before Instant Bank Pay the process of chasing and collecting a failed payment could take 21 days; using this feature Cuckoo has the capability to reduce this to just seven days.

 

Alexander Fitzgerald, Founder and CEO at Cuckoo, said: “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.”

Merchants can build the Instant Bank Pay option straight into their checkout flow or simply send a payment request with a link to pay. Similar to a mobile wallet payment, payers are seamlessly connected to their bank, and can authorise a payment directly from their bank account in just a few clicks.

 

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NutreeLife triples production with finance from Siemens Financial Services

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Plant-based snack manufacturer NutreeLife has massively increased its production capacity with the help of a hire purchase solution from Siemens Financial Services (SFS).

Founded in 2017, NutreeLife is a rapidly growing company which produces vegan protein bars, snacks and other healthy vegan products. Following a significant increase in demand, the manufacturer wanted to invest in a new production line.

As Patrick Mroczak, MD and CEO at NutreeLife Ltd explains, “We were ready to invest in the next stage of business development. We needed new equipment to meet demand but we also wanted to preserve our cash flow to deal with the volatility of the pandemic.”

To protect the business’ working capital, SFS suggested a hire purchase arrangement. Under the agreement, NutreeLife could acquire the equipment immediately and with no upfront costs. Instead, SFS tailored the arrangement so that the company could spread the cost over 5 years in regular payments and at the end of the arrangement NutreeLife will automatically own the equipment outright.

Under the hire purchase solution, the manufacturer also met the conditions for the UK government’s super-deduction tax initiative, whereby a company investing in qualifying new plant and machinery assets is able to claim 130% of the equipment’s value in year one.

“As a relatively new business, it’s not always easy to gain access to the right finance at a good price but SFS were incredibly accommodating. They really understood the benefit of the technology for our business and helped us unlock the investment,” adds Mroczak.

With the new equipment and technology installed, NutreeLife has been able to triple its production and turnover, and expand operations in tow.

“Despite the ups and downs of the pandemic, the new production line has helped us to keep things moving. As demand rises we’ve been able to take on much more staff and use our working capital towards stockpiling raw materials when needed.”

And the business’ success has not gone unnoticed. NutreeLife was awarded Small Business of the Year at the 2021 Lancashire’s Be Inspired Business Awards (BIBAs).

“Working with SFS has truly opened up news avenues of business for us. The team is so fast and responsive and clearly dedicated to finding the best solution for our machinery needs,” comments Mroczak.

Kirsty Talmage-Rostron, Business Development Manager – UK South at Siemens Financial Services comments, “It’s always exciting to work with an innovative award-winning manufacturer like NutreeLife. Despite the challenges of COVID-19, we’ve been able to help the business rapidly develop and look forward to continuing to support this growth strategy as the business expands into new markets.”

 

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HYDR DEVELOPS INVOICE FINANCE PLATFORM TO INTEGRATE WITH MAJOR CLOUD ACCOUNTING SOFTWARE PROVIDERS

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MANCHESTER – UK – 17th January 2022 – Fintech start-up, Hydr has developed its proprietary invoice finance platform to integrate with more major cloud accounting software providers including Sage and QuickBooks.

After launching exclusively with Xero in May, the Hydr platform can now be accessed by millions more SMEs in the UK who want to leverage their unpaid invoices to optimise cash flow and help fuel their growth.

Users of Sage, FreeAgent, KashFlow, QuickBooks and Xero who sign up with Hydr can get paid almost immediately for the work they have completed and invoiced, rather than having to wait out long payment terms and even having to consider extending their borrowings to maintain working capital.

Customers who link their account to the Hydr platform can expect a class-leading, seamless integration. No duplication of data is needed, they simply continue to raise their invoices with their cloud accounting provider as normal and Hydr will do the rest, funding approved invoices within 24 hours.

Hydr co-founder, Nicola Weedall said, “We’re so pleased to have achieved this product milestone. The impact of long payment terms and late payments is affecting millions of small businesses in the UK; many are navigating CBILS repayments and ramping up post-Covid trading which can put a strain on working capital. We feel so strongly that getting paid early is the best way of optimising cash flow, far better than extending borrowings.”

Hydr co-founder, Hector Macandrew said, “Invoice finance in years gone by has often been complicated and time consuming to apply for, complex to manage and opaque in pricing. It is absolutely ripe for disruption and cloud accounting and open banking has made this reinvention achievable. With our simple, transparent and fairly priced proposition, it is now more accessible and attractive to small businesses than ever. We encourage more businesses to consider it.”

Hydr helps small businesses optimise their cash flow with fully digital onboarding that takes just 15 minutes. Hydr’s platform connects with a company’s data and financial information creating a seamless digital experience without the need for the company to submit any additional paperwork. Funding decisions are given in real time and Hydr pays 100% of the value of an invoice (rather than the traditional 70-90%) within 24 hours, minus a transparent, fairly priced fixed fee. Once quoted, the fee never, ever changes and includes credit insurance.

Hydr works with small businesses registered in England in Wales that sell products or services to other businesses (B2B).

 

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