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Streamline bill and invoice payments with Open Banking Payments: A comprehensive guide

Illustration of an invoice with a QR code and a hand using a calculator for bill payments

Paying bills and invoices is a necessary but often tedious task for both businesses and consumers. However, open banking and account-to-account (A2A) payments are modernising how bills and invoices can be paid, offering more convenient, secure, and cost-effective options.

In today’s blog, we’ll explore how open banking is transforming bill and invoice payments and the key benefits this brings.

Understanding Bill & Invoice Payments 

Bills and invoices are a regular occurrence for businesses and individuals. Common examples include utility bills, rent payments, contractor invoices, subscriptions, and more.

Traditionally, some of the most popular payment methods for bills and invoices are:

  • Checks: Still commonly used, but inefficient and prone to getting lost.
  • Cash: Convenient for some in-person payments but not practical for remote transactions.
  • Credit/Debit Cards: Easy to use but usually involve transaction fees that can add up.
  • Bank Transfers: Secure but can take days and lack remittance data.
  • Online Bill Payments: Convenient but often involve third-party fees.

While these methods get the job done, they come with friction and limitations around speed, cost, and data sharing. This makes bill and invoice payments unnecessarily cumbersome.

The Benefits of Streamlined Payments

Paying bills and invoices doesn’t have to be difficult. Streamlined payment processes offer major benefits:

  • Cost savings: Avoid third-party fees and benefit from bank fee rebates with payment processing solutions like Ordo.
  • Increased cash flow: Get invoices paid faster to optimise working capital with real-time bank transfers, cheaper than card payments.
  • Enhanced security: Leverage bank-grade security and avoid storing card details. All payments are initiated without your customer sharing their card or bank details.
  • Convenience: Initiate payments directly within your invoice management software, like Xero, Sage, QuickBooks using OrdoPay’s integrations. Alternatively, embrace contactless payment technology by enabling customers to scan a QR code on the invoice. This QR code contains a secure tokenised link, ensuring a safe and straightforward payment process for your business.
  • Automatic reconciliations: Receive reconciled payments directly, with built-in prepopulated payment fields, saving your business thousands of hours per year.
  • Compliance: Maintain an audit trail for invoices and payment confirmation. 
    Moreover, streamlined payments, facilitated by Open Banking, enable you to alleviate regulatory burdens by eliminating PCI DSS compliance prerequisites, thanks to the exclusion of card or banking details collection. This ensures heightened security while minimising overhead linked to privacy and regulatory considerations.
  • Remittance details: Include key metadata like invoice numbers as well as the invoice attachment.

When businesses allocate less time to paying bills and reconciling payments, they can focus more on core operations.

What are the challenges with traditional payment methods?

Why haven’t bills and invoices benefited from streamlined payments before? There are a few key challenges with traditional options:

  • Checking account details: Payers need to collect and enter account information for each biller.
  • Lack of remittance data: Key metadata isn’t always sent alongside payments through legacy rails. 
  • Batch processing: Many payment methods have cut-off times and settle in batches.
  • Limited accounting integration: Most payment methods don’t integrate directly with accounting software like Ordo does.
  • Cost: Paper checks and card fees quickly add up, especially for high payment volume.
  • Errors and fraud: Sending payments without confirmation can lead to costly mistakes.

Together, these limitations create friction and inefficiency in the payment process. 

Automating Bill & Invoice Payments with Open Banking

Fortunately, open banking and account-to-account (A2A) payments provide a modern solution. By linking bank accounts through open banking, businesses can automate sending and receiving invoice payments. 

Key advantages include:

  • Instant Bank-to-Bank Transfers: Facilitate swift fund transfers between accounts, eliminating intermediaries for speed and efficiency.
  • Seamless Checkout Experience: Securely present payment requests through various channels (PayNow button, QR code, SMS, etc.), ensuring a seamless and rapid payment process for customers.
  • Enhanced Remittance Data: Include structured invoice and payment information along with transactions, enhancing transparency and record-keeping via Ordo.
  • Simplified Account Mapping: Ease online bill payments by eliminating the need to repeatedly input account details when settling payments to multiple billers via Ordo.
  • Reliable Account Validation: Prevent errors by validating account numbers prior to making payments, ensuring accurate transactions.
  • Same Day Settlement: Accelerate settlement times and reduce delays, leading to quicker access to funds.
  • Streamlined Reconciliation Automation: Streamline the matching of invoices and payments, and manage accounting tasks seamlessly by utilising Ordo’s integration with accounting systems.
  • Cloud Integration: Seamlessly connect with accounting platforms such as QuickBooks, Sage and Xero by integrating with Ordo.
  • White Labelling: Customise the payment page interface to align with your business’s brand identity, reinforcing a consistent and professional appearance.

With the right open banking solution like Ordo, bill and invoice payments can be reduced to one-click operations initiated right within an accounting system. This removes the friction, costs, and uncertainty inherent in legacy payment rails.

Security and Compliance Considerations

While open banking introduces new possibilities, security and compliance remain paramount when moving money. 

Payment Initiation Service Providers (PISPs) like Ordo offer a high standard of leading security solutions:

Bank-grade security: Leverage multi-layered security frameworks used by financial institutions.

Encrypted data: Sensitive data is encrypted both in transit and at rest.

Read-only access: Solutions only read transaction data and cannot move funds directly.   

Regulatory compliance: Solutions meet standards like PCI, SOC 2, ISO 27001, and more.

Whitelisting: Only approved accounts can transact, preventing fraud.

Partner onboarding: Financial partners undergo rigorous vetting and testing.

By leveraging industry best practices for security and compliance, businesses can confidently automate payments while remaining protected.

The Future of Bill & Invoice Payments 

How modern bill and invoice payments will look like?

Bill and invoice payments are undergoing a digital transformation. Open banking infrastructure and account-to-account (A2A) payments remove the friction inherent in legacy payment methods. This brings savings, control, and efficiency to what was previously a cumbersome process.

As more companies adopt automated payment processing solutions like Ordo, expect to see:

  • Increased adoption of account-to-account payments (A2A)
  • Further bank API and infrastructure development
  • More accounting platform integrations
  • Mainstream business usage of open banking
  • Better cash flow for businesses and billers
  • Innovation in reconciliation and reporting

Ultimately, open banking enables billers and businesses to unlock new value in the billing and payment process. Smarter account-to-account payments benefit all parties with cost savings, convenience, security, and speed. By connecting payments directly to accounting systems, reconciliation and reporting also become automated. Altogether, this represents the next generation of B2B payments driven forward by solutions like Ordo.

Whether you’re collecting online payments via payment gateway solutions, eCommerce platforms, contact centres, in-person at the Point of Sale (PoS invoice sending), or managing refunds and pay-outs – you have the opportunity to enhance the payment process by providing customers with a secure request-to-pay message. This message aims to simplify the payment procedure for your customers whilst increasing your chances of getting paid.

All Ordo Request to Pay solutions include payer options (such as instalments and extensions) at the business’s discretion, along with standard biller attachment capabilities.

Wrapping up

The process of settling bills and invoices has often proven intricate and time-consuming within the dynamic state of financial transactions. Yet, the rapid development of open banking in the UK, coupled with the rise of account-to-account (A2A) payments, signals an ongoing transformation. This transformation is no longer confined to the imagination—it is now a reality that not only introduces convenience but also enhances security and cost-effectiveness, fundamentally reshaping the landscape of bill and invoice payments.

Optimising cash flow with payment automation is a crucial objective that Open Banking’ Payments’ transformative potential unfolds in various modern avenues, fortifying payments with heightened security, swifter processing, and greater efficiency. From expediting bank transfers to guaranteeing swift and secure checkout experiences, its impact is palpable and benefits the whole business’s income collection cycle. The seamless integration of enriched remittance data, streamlined reconciliation processes, and cloud connectivity via the Ordo platform-as-a-service illuminates a path not just to efficient transactions, but to financial interactions grounded in trust and ingenuity.

As you navigate this ever-evolving domain of open banking payments, take a moment to contemplate the vast potential that lies ahead. With every bill and invoice transaction, lies an opportunity to leverage open banking’s capabilities, leading to smoother processes, increased efficiency, savings, more engaging customer experiences, and robust connections between businesses and clients, that you can readily utilise.

The future of bill and invoice settlements is being redrawn through innovation, efficiency, and your business needs at its core. Take a look at how effortless and secure bill and invoice payments using Ordo appear in real-time with a live demo.