The Role of Open Banking in Streamlining Bill Payment Processes

Introduction

According to the partners, their intelligent flexi-payment service will provide organizations like utility providers with a straightforward and safe method to collect monthly bill payments at a rate that is faster than direct debit and at a cost that is lower than card-based transactions.

A platform that is regulated by the Financial Conduct Authority (FCA) is aimed to provide customers with safe and cheap payment options, while also assisting businesses in lowering costs, improving cash flow, and streamlining operations. This platform offers an alternative to card-on-file instructions for bill payments. In order to enable clients to authorize payments to be made directly from their bank accounts to businesses on a recurrent basis, the service makes use of Ordo’s innovative Variable recurrent Payments technology, which is driven by open banking.

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It is anticipated that the expansion of VRPs will achieve full-scale implementation in the United Kingdom in the year 2025. At this point, Eviden’s open banking solution will be extended to full deployment with consumers. The system uses artificial intelligence to proactively discover, support, and guide customers with tailored payment plans. It does this by monitoring customers’ financial situations through a regulated consented sign-up process that is governed by the Financial Conduct Authority (FCA).

The method thus makes it possible for payments to be adjusted to the specific financial circumstances of each individual customer, rather of adhering to a fixed date. This makes it possible for donations to come from a variety of funding sources, which helps to make the service more affordable. According to Eviden, this not only benefits clients but also enables billers to avoid the time-consuming and expensive process of chasing missed direct debits when they occur.

Because it allows customers to make several payments when they have funds available, the system also encourages customers to take a proactive approach to the settlement of their bills. Not only can it accept payments from numerous payees for a single payment, but it also permits donations to be made toward bills by friends or family members. The blockchain technology developed by ByzGen has been included into the Eviden platform in order to enhance data security, compliance, and efficiency while simultaneously reducing bias.

Industry Comments

“Open banking-powered solutions offer a lower cost-per-transaction to process than cards and automate account reconciliations to reduce administration costs. For large providers, the reduction in transaction fees alone will lead to millions of pounds in savings,” says James Sharpe, sales director, digital native business, Eviden.

FAQ

What is the intelligent flexi-payment service?
It’s a flexible payment solution using open banking technology that enables organisations, like utility providers, to collect recurring payments securely and affordably.
How is it different from traditional payment methods like direct debit or card payments?
This service provides an alternative to card-on-file and direct debit instructions by using open banking-powered Variable Recurring Payments (VRP). It reduces transaction fees, eliminates the need for card storage, and allows payments to be tailored to a customer’s financial situation.
What is Variable Recurring Payments (VRP)?
VRP allows customers to authorise recurring payments directly from their bank accounts, offering greater security and flexibility compared to traditional recurring payments.
How does this service benefit businesses?
- Cost Savings: Lower transaction fees compared to card payments.
- Improved Cash Flow: Faster and more reliable payment collection.
- Efficiency: Automated reconciliation reduces administrative burden.
How does the system help consumers?
- Flexibility: Payments are tailored to their financial circumstances rather than being fixed to specific dates.
- Personalized Support: AI-driven tools offer customized payment plans.
- Collaboration: Contributions from friends or family can be used for bill payments.
Is this service regulated?
Yes. It operates under FCA (Financial Conduct Authority) oversight to ensure security and compliance.
What role does blockchain play in this solution?
Blockchain technology, provided by ByzGen, enhances data security, ensures compliance, and improves operational efficiency while reducing potential biases.
When will this service be fully implemented?
Full-scale implementation in the UK is expected by 2025 as VRP technology matures.