Whether you’re thinking of setting up a business to offer a payment solution based on Open Banking or you are a business wanting to strip away the costs and inefficiencies of legacy payment types – Yapily is here to help you.

But first, let’s get started with what Open Banking Payments are!

Open Banking Payments

Open Banking Payments refers to a financial system that allows authorised third-party providers to access and initiate secure transactions directly from a user’s bank account, facilitating seamless and efficient online payments.

Account-to-Account (A2A) Payments

Account-to-Account (A2A) Payments are direct transfers of funds between two different bank accounts expedited by authorised third party providers. This allows fast and secure transactions that remove the reliance on traditional and costly card schemes.

Account Servicing Payment Service Provider (ASPSP)

Similar to banks and financial institutions, ASPSPs enable payment initiation and access to account information for TPPs. As a result of PSD2, all ASPSPs are required to participate in open banking.

e.g. Account Servicing Payment Service Providers (ASPSP) provide and maintain payment accounts for anyone using payment services.

Batch Payment

Batch Payment is a single transaction process where multiple payments are sent simultaneously from different debtor accounts to different recipients, streamlining payment operations for businesses and larger enterprises.

Bill Payments

Bill Payments via Open Banking APIs refer to the ability to transfer funds from a payer’s account to a service provider or biller to settle a specific invoice or recurring payment.

Bulk Payment

Bulk Payment is a large-scale transaction that involves the simultaneous transfer of funds to multiple recipients on the same date using the same account, making it a convenient and efficient method for organisations to manage their outgoing payments.

Commerce Payments

Commerce Payments are seamless and secure transactions between customers and merchants during online or in-person commercial activities via Open Banking APIs.

Digital Wallet

Digital Wallet is a secure virtual platform that enables users to store, manage and make payments using various open banking payment methods, providing convenience and flexibility in conducting financial transactions.

Dividend Payments

Dividend Payments are the distribution of a portion of a company’s profits to its shareholders through electronic transfer of funds using Open Banking APIs.

Faster Payments

Faster Payments is a real-time electronic payment service that enables immediate and irrevocable transfer of funds between participating banks, enabling fast and efficient transactions.

Failed Payments

Failed Payments in Open Banking payments refers to an unsuccessful transaction attempt where the funds are not transferred as intended for several possible reasons, including but not limited to insufficient funds, technical issues, or authorisation problems.

Interest Payments

Interest Payments are a type of bulk payment from a financial institution disbursing interest earned on a customer’s saving or investments directly into their designated bank account through an authorised third-party provider (TPP).

Invoice Payments

Invoice Payments refers to the use of Open Banking APIs for a payer to initiate a transaction and settle an invoice or bill issued by a payee or merchant. Invoice payments can also be carried out in ‘bulk’.

Pay by Bank

Pay by Bank allows buyers to make online purchases directly from their bank account using authorised third-party providers, offering a secure and convenient alternative to traditional card-based payments.

Payment Provider

Payment Provider is a third-party company or service that facilitates secure and seamless financial transactions between customers and merchants, leveraging Open Banking APIs to access and process funds from user’s bank accounts.

Non-Sweeping Payment

Non-Sweeping Payment is a transaction where the full amount is transferred from the payer’s account to the payee’s account without any third-parties holding or consolidation of funds.

Peer-to-peer Payments

Peer-to-peer Payments are where a direct transfer of funds takes place between individuals such as friends and family using Open Banking APIs.

Reconciliation

Reconciliation in Open Banking is the comparison and matching of financial transaction data between different systems or records to ensure accuracy and consistency in the reporting of payment transactions.

Refund

Refund refers to the reversal of a previous payment transaction where funds are returned from the payee’s account bank to the payer’s account. This is usually due to a cancelled or returned purchase or for other specified reasons.

Scheduled Payments

Scheduled Payments are recurring payments that are set up occur on a predetermined scheduled like weekly, monthly, or annually. The payer authorises the payment to be made automatically without the need for manual intervention on an on-going basis.

Settlement

Settlement refers to the final step in the payment process where funds are transferred between the payer’s and payee’s accounts. This process utilises standardised APIs and communications protocols for efficiency, security, and transparency.

Single Payments

Single Payments are individual, one-time transactions where funds are transferred between the payer and payee accounts for a specific purchase or payment.

Subscription Payments

Subscription Payments refers to a recurring transaction where funds are automatically deducted at regular interval from a payer’s account to pay for a subscription-based service or membership.

Sweeping Payment

Sweeping Payment is a type of Variable Recurring Payment (VRP) where funds are automatically moved from one account to another, typically to optimise liquidity or manage balances more effectively.

Transaction fees

Transaction fees in Open Banking payments are usually zero, as there are no legacy card and interchange fees. However, some financial institutions or payment service providers that offer apps and websites may choose to charge for their products and services as part of their business model.

Third Party Provider (TPP

Third Party Provider (TPP) is an authorised external organisation that offers financial services to consumers or business users by assessing their account information and initiating payments through Open Banking APIs with the user’s consent.

Treasury Payments

Treasury Payments are financial transactions involving the management and movement of funds by corporations, governments, or financial institutions to optimise liquidity, invest surplus funds, or meet other treasury-related objectives.

Variable Recurring Payments

Variable Recurring Payments are periodic transactions where the amount may vary due to changing factors and or conditions specified in the payment agreement or contract.