January saw the UK’s property market make a strong start, but the inevitable ups and downs of the property market will be assessed over the coming weeks as we head into Q2.
With mortgage approvals decreasing resulting from increased borrowing costs following the mini-Budget, the housing market showed more robust activity since Christmas than was feared at the end of 2022, and forecasts from those in the building trade have remained upbeat so far.
Property experts, Knight Frank, are predicting a house price fall of around 10% over two years, and this is as a direct result of higher borrowing costs curtailing affordability.
With this backdrop, what easy online payment solutions will keep your property business payment solutions running smoothly and efficiently, what is open banking and can it deliver secure instant payments at low cost, meaning you can keep agent charges and everyone’s service charge low to help weather this contraction, especially for those paying rent?
In this blog we’ll cover:
- What is open banking, and how do account to account payments work? Do they really give instant payment and still mean secure instant payments?
- What are the benefits of open banking, can it integrate with your enterprise business payment systems?
- What secure instant payments can open banking be used for and can you get agent charges as an immediate payment?
- What are Variable Recurring secure instant payments and can they be used for paying rent and service charge?
1. What is open banking, and how do account to account payments work? Do they really give instant payment and still mean secure instant payments?
Open Banking payments refer to a type of transaction that uses open banking technology to facilitate secure and immediate account to account payments. Open Banking is a system that allows individuals and businesses to share their financial information securely with FCA authorised FinTechs, like Ordo, enabling them to offer innovative business payment solutions.
With Open Banking payments, individuals and businesses can make secure instant payments directly from their bank accounts without the need for intermediaries such as credit card companies or payment processors. This immediate payment capability allows for easy online payment and makes the collection of service charge, agent charges and paying rent lower cost using less resource.
For enterprise business payment systems, Open Banking payments can provide a cost-effective and more secure convenient alternative to traditional payment methods. Open Banking payments can be used for paying rent, enabling tenants to make secure instant payments directly making account to account payments from their bank accounts to their landlords’ accounts, and for agents collecting ad hoc and repeated fees such as service charge and agent charges.
So in short, open banking payments enable immediate, secure, and cost-effective account-to-account payments. This technology provides an efficient and convenient way to facilitate payments for a variety of purposes, including paying rent, service charge, agent charges and other business transactions.
2. What are the benefits of open banking, can it integrate with your enterprise business payment systems?
Open Banking payments offer several benefits, including:
- Speed and Efficiency: Open Banking payments allow for immediate, secure, and direct account-to-account payments
- Cost-Effectiveness: Open Banking payments can be a cost-effective alternative to traditional payment methods, such cards, as they have a low fixed flat fee and reduce administrative costs and time.
- Improved Cash Flow: Open Banking payments provide secure instant payments which helps businesses manage their cash flow more effectively.
- Increased Security: Open Banking payments use secure technology and require user authentication in easy online payment journeys, reducing the risk of fraud and improving the overall security and convenience of secure instant payments.
When it comes to integrating Open Banking payments with enterprise business payment systems, businesses can use Open Banking APIs to connect their business payment solutions and systems with FCA authorised FinTechs like Ordo. This integration allows for seamless, automated, and secure instant payments, reducing manual processing and improving overall efficiency. Integration is easy and takes a matter of weeks.
Integrating Open Banking payments with enterprise business payment systems can provide businesses with increased speed, efficiency, security, and cost-effectiveness in payment processes, ultimately helping improve their overall financial management, easy online payment is just one part of open banking and account to account payments.
3. What secure instant payments can open banking be used for and can you get agent charges as an immediate payment?
Currently open banking payments are for single immediate payments, so would cover agent charges and ad hoc costs that you want by way of immediate payment. Open banking also covers repeated secure instant payments from and to accounts in the same name: eg repaying loans or credit cards from a current account in the same name – secure instant payments where both the sending account and the receiving account are in the same name, it’s called sweeping. If you have business payment solutions that require you or your clients or your client’s tenants or customers to make single instant payment, or repeated account to account payments with money moving between accounts that are in the same name, then open banking will give an easy online payment solution that you can integrate into your enterprise business payment systems today.
4. What are Variable Recurring secure instant payments and can they be used for paying rent and service charge?
Open Banking Variable Recurring Payments are a type of business payment solution enabled by Open Banking technology that facilitates instant and secure account to account payments for variable amounts on a recurring basis, a bit like a smart direct debit, which is coming this year.
Open Banking Variable Recurring Payments (VRP) can be integrated into enterprise business payment systems via API in a matter of weeks, providing efficient and cost-effective business payment solutions. This technology enables easy online payment, improving the overall efficiency of payment processing whilst providing clients, tenants and landlords with secure instant payments for repeated ongoing services.
Open Banking VRP involves a one time set up between instant payment payer and the party collecting secure instant payment, be that the agent, the landlord or the agent on behalf of a landlord or other party such as a conveyancer. The open banking VRP mandate set up takes a matter of minutes and will include the maximum and usual amounts and frequency of instant payment to be collected. Once this open banking VRP mandate is set, the collecting party can take instant payment repeatedly, within the original open banking VRP mandate, without the immediate payment party having to authorise each instant payment; automatic account to account payments are made as immediate payment every month or however frequent the mandate is scheduled for, just like a direct debit.
The difference between an open banking VRP instant secure payment arrangement and a direct debit is that the open banking VRP mandate is set up within minutes, and instant payment is a secure instant payment for every instalment, there’s no 3 day notifying cycle and 5 days before the agent charges being collected are certain.
This immediate payment element and ease and speed with which an open banking VRP mandate is set up and paid every time is why open banking VRP is a good option for paying rent and service charge which, when coupled with the single open banking easy online payments for those remaining ad hoc agent charges, means you’ll be collecting all your property business income via open banking and increasing cash flow and lowering administration time and costs across the board.
Overall, Open Banking including VRP provides innovative business payment solutions which can be integrated into enterprise business payment systems to facilitate secure instant payments. With the ability to integrate with enterprise business payment systems and offer immediate payment processing from day 1, these open banking business payment solutions offer an efficient and reliable option for property businesses who are likely to be tackling a downturn in the market for the rest of this year.
If you want to find out how your property business can unlock the benefits of open banking and start collecting service charge, agent charges using instant payment open banking, to get tenants paying rent via open banking VRP, talk to Ordo today.