Open banking payments for business: what pay by bank costs

What are open banking payments?

Your customer pays straight from their bank account: they pick their bank, approve the payment in their banking app, and the money moves as a bank transfer rather than a card payment. No card scheme sits in the middle, which is why the providers talk about lower fees. Token.io states "No interchange fees" and "No chargebacks". TrueLayer says pay by bank settles in your account in real time. The UK limit on GoCardless is £25,000 per payment, though the customer’s bank may set a lower limit.

What does pay by bank cost per payment?

What does TrueLayer charge?

Not published. TrueLayer publishes no rate card; its payments page routes merchants to its sales team. TrueLayer’s own page claims "up to 50% lower fees than cards" (a vendor claim, not a price), which tells you nothing until you have a quote. If you are offered TrueLayer, directly or through a payment provider, get the per-payment fee, any minimum monthly charge and the refund fee in writing, then run them through the sums below.

Is pay by bank cheaper than a card machine?

It depends on the size of each payment, because GoCardless charges a fixed 20p on top of the percentage and then caps the fee at £4. Our house example is a business taking £5,000 a month, here as invoices:

The arithmetic for GoCardless Standard:

• £100 payment: £100 × 1% + 20p = £1.20, plus 20% VAT = £1.44; × 50 = £72.00
• £1,000 payment: £1,000 × 1% + 20p = £10.20, capped at £4, plus VAT = £4.80; × 5 = £24.00
• £20 sale: £20 × 1% + 20p = £0.40, plus VAT = £0.48, against £0.34 on SumUp

The fee is capped from £380 a payment upwards, and it only beats SumUp's in-person 1.69% above about £48.98 a payment once VAT is added. On £5,000 of £1,000 invoices, pay by bank saves £47.25 a month against Square's online rate. On £20 counter sales, it would cost more than the card machine you already have.

How do refunds work with pay by bank?

There is no card to reverse, so a refund is a fresh payment from you back to the customer. On TrueLayer, refunds can be full or partial, must go back to the original paying account, and the total refunded cannot exceed the original payment (TrueLayer refund docs). GoCardless says refund fees apply to all refunds; the amount is not published on its pricing or support pages (GoCardless pricing and fees). The upside for you is the absence of card chargebacks: Token.io states "No interchange fees" and "No chargebacks". The flip side is that some customers trust a card more for a first purchase from a business they do not know, precisely because a card lets them dispute it.

When does pay by bank make sense for a UK business?

It earns its place for invoices, deposits and one-off payments of roughly £50 and up, especially at £380 or more where the GoCardless cap applies: builders, accountants, wedding venues, car repairs. It also suits businesses that want money in the account on the day, and TrueLayer says pay by bank settles in your account in real time.

It is the wrong tool for a café or shop taking £20 sales at the counter. The fixed 20p plus VAT makes small payments dearer than a card, and your customers will reach for a card or phone anyway. Keep the card machine for the counter, and if card fees are the real worry, check you are on the right rate first: our cheapest card machines guide and how to reduce card processing fees cover that, and the free statement review will tell you what you pay now.

Open banking payments: common questions