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Race on to capture bulk payments

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This June has seen a couple of initiatives where developers are targeting new online bulk payment mechanisms. Do they represent the emergence of a new trend?

16th Jun 2021
Editor in Chief AccountingWEB
Columnist
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At the beginning of the month, cloud accounting software developer Clear Books announced an integration with Revolut to handle online bulk payments.

Shortly afterwards a similar announcement arrived from Open Banking infrastructure platform Yapily about its partnership with another bulk payments specialist, Comma.

Open Banking has been around for more than two years, making it theoretically possible to activate payments via industry standard programming interfaces put in place by the European Union’s PSD2 directive.

Working applications have taken their time to bed in, but what was interesting about this month’s announcements was the way both players presented their new initiatives as the answer for one of the most common finance headaches facing small businesses – paying out the monthly payroll run.

To find out if there were any common factors driving developments we talked to Clear Books CEO Ruth Fouracre and Yapily chief commercial officer Iain MacDougall to hear their analysis of the fast-moving bulk payments scene.

Clear Books plugs into Open Banking

For Clear Books, the Revolut integration is its second banking integration project after working to create a seamless sign-in for Clear Books users who banked with Metro.

“We wanted to try something different with Revolut and take the pain out of one of the main pain points for small businesses,” said Fouracre. “If you need to pay more than 10 bills or payrolls a month, most businesses have to input payee details and the amounts to make a payment and then enter the data separately in Clear Books. We wanted to reduce the time they spent keying in data.”

After working with Revolut to integrate their systems, Clear Books lets users enter the data into the payroll module and click a Submit draft payment link. The details will go into Revolut for final review and activation.

“Stopping that duplication is hugely time-saving for small businesses and accountants running payrolls or paying bills on their behalf,” Fouracre said. “None of the other accounting platforms offer this feature with Revolut – it didn’t exist until we launched it two weeks ago.”

Open Banking provides app developers like Clear Books with an opportunity for innovation by allowing them to plug into mechanisms to access bank account data and trigger payments. “That’s how we get payments made and get the information coming back that Clear Books can use to suggest which bill it should be applied to.” she said.

“This year we’re planning to build on those partnerships. We are looking at banks and non-bank partners to offer more integrated banking features and services that makes sense within the product.”

 Yapily expands the foundation layer

Yapily is attacking bulk payments from the other direction, working in tandem with specialist app developers like Comma.

Yapily has built the underlying platform that solves the problem of fragmentation when more than 600 banks and as many APIs are in play within the payments ecosystem, explained Yapily’s Iain MacDougall.

Comma is the first app developer to launch into online payments in the UK using Yapily’s platform. Plans and projects are underway to support other kinds of bulk and variable payment types, said MacDougall.

Until these kinds of payment mechanism emerged, UK businesses had to rely on corporate bank accounts and pay premium charges to have access to such facilities, he argued.

“In the past banks controlled the rails to move the money. But now it’s been mandated by PSD2, we can handle the bulk pay component as an API endpoint and the bank becomes the plumbing.

“Comma built the interface to accounts to create the instruction, which it packages up for the Yapily API and we initiate the payment instruction to remit £X from account Y to account Z,” said MacDougall.

Growing maturity

The sudden blooming of bulk payments this summer is less the result of a specific trigger than a sign of Open Banking’s growing maturity, he suggested.

“When Open Banking really got going 18 months ago, the use cases were quite simple. There’s been a general realisation that the capabilities Open Banking can support are far broader and developers are realising new possibilities that were out of reach before. Bulk payments are one of those possibilities. Expect to see more.”

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