Speedy implementation
Ensuring a seamless move to digital payments, open banking services are quick and simple to implement. Once they are set up, most charities and social enterprises are then able to realise income within the same day, with minimal disruption.
Open banking in action – Sir Captain Tom Moore
The Captain Tom Foundation, set up by Sir Captain Tom Moore and his family in 2020, implemented the PayitTM by NatWest payment solution – which uses open banking infrastructure – as the first donation mechanism on its website.
It enabled customers of major UK banks to donate to the campaign using the Payit button on the donate page. They were then redirected to their bank to complete the payment.
Captain Tom’s initial and hugely successful NHS fundraising campaign via JustGiving also offered an open banking donation option, which saw a significant volume of donations.
‘It enables us to collect donations from the general public and organisations in a fast, simple and secure way.”
Gemma Huddleston, The Captain Tom Foundation
Source: Business Money
Today, there are several providers offering open banking digital payments for the charitable sector. You can find some of these in the Open Banking Implementation Entity (OBIE) app store.
As many charities operate on legacy tech infrastructures, day-to-day management is hindered by manual processes and the need to reference multiple websites and platforms at the same time.
Open banking can also help improve charitable organisations’ back-office functions, saving hours of time and resource. For example, seamless and secure integration of bank account data into a cloud accounting platform provides:
• multi-account visibility • comprehensive spending analysis • support for setting and maintaining saving goals • immediate donor-payment reconciliation.
Altogether, it can translate to hours of valuable time returned to employees that they can invest in more mission-critical activities.
Security and regulation
For charities, as with all organisations, security around mobile-first payments is a key priority. Open banking service offerings aim to provide a great customer experience alongside robust security controls, many of which operate quietly in the background.
Regulation
Open banking providers are regulated by the Financial Conduct Authority (FCA) to provide certain services. Only companies that are authorised by the FCA can use open banking to initiate payments by instant bank transfer.
Some security controls:
• OBIE Directory services are only accessible to FCA (or the European regulatory equivalent)
regulated providers, as well as banks and financial institutions in Guernsey, Jersey and the Isle of Man (the Crown Dependencies).
• Robust authentication is required to make payments or provide access to financial information. • Strong encryption is used throughout.
While there has been an increase in the number and frequency of bank-related scams, no new forms of fraud have been detected as a direct result of open banking technology.
We recommend that you check the FCA register to see the specific activities that any firm has FCA and/or Prudential Regulation Authority (PRA) permission to provide before going ahead. You should also contact the firm and ask them to confirm the specific protections available to you.