New! Open Banking

August 6, 2021

We are delighted to announce that all UK merchants can now connect their bank account via Open Banking.

Open Banking is revolutionising the way we manage our money and is one of the newest innovations in banking and personal finance.  It came into force to bring better consumer protection and improved security whilst pioneering innovation in the financial services industry. The aim? To re-energise banking by giving both customers and SMEs the opportunity to give access to their transaction data. Our latest integration with Open Banking features is here to serve a better customer experience for our merchants. So with that in mind, let’s delve into Open Banking.

What is Open Banking?

Open Banking is a new way for customers to give third-party providers (like us!) secure access to your financial data. This important and innovative change to the finance industry came into force when the Government decided it was time to put the customer in the driving seat of their financial information.

It’s a banking practice that uses open APIs to connect banks, third-parties and technical software providers with open access to consumer banking, transaction, and other financial data or to make payments.

Open Banking integration improves financial services for customers by opening up access to data customers historically kept in-house. With banks effectively putting in place the infrastructure for their customers’ data to be shared more easily with third parties when the customer chooses to do so, Open Banking is recognised as a safe and secure practice.

For example, it means that you can securely give Pomelo Pay access to your bank information, to allow us to make payouts to your bank account.

All authorised third parties are certified establishments and have the same trustworthiness as a bank, as they will be regulated by the Financial Conduct Authority (FCA), and will appear on the FCA's Register, and/or the Open Banking Directory.

Why is Open Banking important?

It’s important because it means that the customer is in control. It means that any data you generate is owned by you, rather than your bank. You can decide who you want to share this data with and give a third party service access to things that were available once only to the bank. This allows third parties to then make better decisions and choices, based on what you have shared.

How can Open Banking benefit customers?

Secure setup

Merchants are able to add their bank by just going through their banking app or portal. This clear connection to their bank account avoids all human error with the elimination of entering details manually. That means no mistakes with sort codes or bank details!

Get paid faster

Open Banking allows us to initiate payments directly to our customers bank account, at a faster pace. We remit money within the next working day to the customers’ bank account. This means you will have the ability to make money transfers from third-parties to either a personal or business account, to spend how it normally suits you...whether it be putting it into a savings account or monitoring bills/subscriptions.

Extra layer of security

Compliance is a big thing for us at Pomelo Pay, so we always need to make sure the account belongs to the business or sole trader. By logging in with Open Banking, it proves that you have ownership of your account, eliminating any further risk of scammers and keeping everyone safe on our platform.

Opportunity to innovate

By sharing your data with us, we can make better decisions; we can innovate and improve the quality of our products and services that customers receive. This will have a positive impact on your life and business as new financial products are being created.

Offers control and choice

Open Banking gives the customer choice and control back over their money and financial information. You are always in control of what information you allow access to.

Improved customer service

Services become more integrated and seamless for the customer, for example payments can be approved more easily while using your mobile banking application. This is because your mobile banking application is most likely to have a built-in 2-factor authentication usually in the form of Face ID, thumbprints or a PIN.

Read our Open Banking FAQ for a full list of banks that offer open banking and how to connect your bank account.

Is Open Banking safe?

Yes, Open Banking is designed with the highest security.

The most fundamental part of Open Banking is that you don’t have to share your data if you don't want to. The rules say that banks can ONLY allow your information to be shared if you have opted in to give permission. Nobody can look at your accounts just because they fancy doing so.

To enrol in the Open Banking Directory, providers have to comply with the strict rules of the FCA. We are trusted to provide Open Banking as we are authorised and regulated by the FCA as an Account Information Services Provider (AISP). This means we are bound by data and security regulations. You can find Pomelo Pay on the FCA register here.

Your money and transactions are always encrypted and stored securely. If you do choose to share your data with a third-party, like Pomelo Pay, it’s important to know that the data stays with only us. It is encrypted and stored securely - only used for remittance and compliance purposes. You are in control of who has access to your data, and for how long.

Under Open Banking regulations, every 90 days you need to reconnect to your bank accounts to make sure you're still happy to use the service.

It’s important to note that there are high bank security levels, so you will never be asked to give access to your bank login details or password to anyone other than your own bank. Not only that, but Open Banking brings extra protection - you are protected by your bank and data protection laws, and at Pomelo Pay, it allows us to minimise fraudulent customers too, making our platform a safer place.

What’s next?

Open Banking is transforming the way customers bank online. With the idea to bring more competition and innovation that lead to better products to help manage your money, we are excited to be a part of this pivotal move in the banking and financial sector. Get in touch with our Customer Success Team to get started today.