Open Banking is a type of secure guided bank transfer. It’s quicker and cheaper than clients paying by card or PayPal, and more secure and less prone to mistake and fraud than a bank transfer, cheque or CHAPS.
The UK is currently the global leader in Open Banking according to the Global Open Banking Index. Endorsed by the UK government, tax payments to HMRC via Open Banking in the UK jumped by 39% in January 2024 compared to January 2023. Forward thinking firms like X-Press Legal Services have been swift to recognise the compliance and security benefits Open Banking brings to clients and their customers.
The benefit for law firms is that once a bill or a fee is agreed and your client authorises payment, money is transferred instantly, directly from your client’s bank account to your firm’s bank account. The money is credited to your law firm’s chosen account, automatically correctly referenced.
How Open Banking payments technology can save conveyancers time and money while demonstrating compliance
You wouldn’t drive off without fastening your seatbelt…but there was a time when people did. Just like, these days, you wouldn’t ask your client to pay your fees without completing an account check process to ensure safe receipt of funds. If you don’t, with fraud so prevalent and law firms regularly hitting the headlines, you could ruin your and your firm’s reputation in an instant, and be responsible for potentially losing hundreds of thousands of pounds.
What are the benefits of Open Banking?
Open Banking uses digital advances to make payments quicker and smarter. Law firms can benefit from using Open Banking for collecting fees and bills by:
- Automatic reconciliation – save time and money in manually reconciling payments. In a survey of businesses we at Ordo carried out, we discovered that businesses spend nearly 10 hours per week on payments administration. Using an Open Banking solution could give you back those 10 hours every week to spend on advising clients and building your business.
- Prevent Fraud – prevent it before it gets you. You don’t want your firm to be hitting the headlines for not doing enough to protect your clients. Hackers fish for emails with bills attached. They hack into the invoice and change the receiving account details to their own, so that when your loyal client pays, the fraudster cashes in.
- Instant payment receipt – Open Banking payments transfer money instantly, giving your firm a liquidity boost. You’ll know for certain whether your client has transferred their money, because the funds will be cleared in your account.
- No bank transfer account number input mistakes – Open Banking facilitated payments don’t require any input by your client. They won’t need to dig out your bill to find your reference or account details, they won’t need to input your account number, risking just one wrong digit. Open Banking is a far more efficient and convenient way for your client to pay your bill, often just a few taps from their phone. Making your bill easy to pay is likely to get it paid a lot quicker.
- Lowering costs – card payment processors charge high fees to collect payments: around 1-4%. On a £200 bill that’s an £8 payment to Visa, Mastercard and your client’s bank on every transaction; you’re buying the card schemes lunch every time you bill.
How does it work?
Using an integrated Open Banking provider that’s regulated by the Financial Conduct Authority, a law firm simply sends a secure payment link to their client’s email or mobile, or a QR code on an email or paper invoice. The client clicks the secure link or scans the QR code. They are immediately shown exactly who’s asking them to pay, how much, and by when. They are securely taken to their bank in a seamless joined up digital journey where the payment is waiting for them to authorise with their bank. The client clicks ‘pay now’, and money is transferred, instantly, from their bank account to yours, via Faster Payments, powered by a secure digital Open Banking journey.
The law firm is notified the client has paid. The money will be in the firm’s account in cleared available funds, automatically correctly referenced.
If you want your firm to be the best in class and to look after your clients whilst making life easier for your firm, Open Banking is a win-win all-round.
Ordo Pay is now fully integrated into X-Press Pay enabling X-Press clients to generate secure payments from consumers.