UK-based fintech Paysend has formed an Open Banking payment initiation partnership with data network Plaid to provide another way for its business customers to receive payments.
In place of traditional payment methods, such as cards and direct debits, the partnership will enable merchants to connect with their customers’ banks via Plaid and initiate a payment through Open Banking rails.
Once the end customer has confirmed the payment, funds are pushed from their account and Paysend makes them available to the merchant the next day, thereby reducing the costs associated with card processing fees and helping improve conversion rates at checkouts.
The new solution will initially be available for payments made from UK bank accounts, but Paysend has plans to roll it out across Europe in 2023.
Ashley Mallett, head of business at Paysend, said the launch of Open Banking Payment Initiation will give companies a “secure, user-friendly, and cost-effective way” to accept online payments in the UK.
“Through Plaid, customers can connect to a global network of 12,000 financial institutions, including the CMA9 and many other longtail institutions. As this payment initiative debits customer accounts, avoiding card scheme involvement, companies can significantly reduce costs and diversify their supply chain by utilising our next-generation product,” Mallett added.
According to Paysend, small and medium-sized enterprises (SMEs) will benefit from a transaction fee that is up to 45% lower than average card payments.
It means that Airwallex’s US customers will be able to instantly and securely verify their bank accounts in the US, either for adding funds to their Airwallex wallet from an external bank account, or for merchants to accept payments from customers within Airwallex’s payment acceptance business.