Open Banking vs Cards for SMEs

If you’re an SME but haven’t harnessed open banking as a payment method yet, you could be missing out on thousands of pounds…


More than 99.9% of all UK businesses are small to medium-sized. And according to the Government’s last report, business population decreased by 390,000 (6.5%) in one year.

To stay afloat in these incredibly challenging and unpredictable economic times, innovation is needed. As is streamlining every possible part of your business.


Enter, open banking…


As an SME, no doubt the main payment method you offer your customers is debit or credit card.

But as convenient as cards may seem compared to even more archaic payment methods, there are numerous ways open banking improves on it – and that’s where the thousands of pounds of savings can come in.

Better cash flow, lower transaction fees, instant settlement, much-improved customer service… It’s all easily achievable by adding open banking to your payment options.

To give you a more tangible idea of how revolutionary (and easy to adopt) open banking is, let’s take a look at how it compares to card payments in various ways:


Cost of transaction


–Debit and credit card–

The average small business spends over £22,000 a month on transaction fees.

That should come as little surprise when you consider how many different fees are applied against a single transaction, such as acquirer fee, interchange fee and scheme fee.


–Open banking–

As open banking does not use commission-based transaction fees, costs are a lot more predictable, and importantly, much lower. The same company that loses £22,000 a month on card transactions could save approximately £19,000 if open banking was used instead.


card vs open banking for SMEs


Settlement period


–Debit and credit card–

With credit and debit card transactions, you usually have to wait several days for funds to settle and your business is at risk of chargebacks. Naturally, this puts pressure on your cash flow and can affect your supplier management.


–Open banking–

Funds are settled instantly with open banking payments. Not only is this convenient for cash flow, but you can also get a real-time understanding of your finances. Plus, you’d see a significant reduction in chargebacks.




–Debit and credit card–

A third of SME online retail businesses experienced fraud in the last year. The result is an average of £4,257 per business. Card-not-present fraud (CNP) was responsible for almost 85% of all card fraud in 2021.


–Open banking–

Open banking is about as secure as it gets. No card details are required, and strong customer authentication (SCA) is built in, which reduces friction in the payment journey.



Customer experience


–Debit and credit card–

There’s a lot of friction and various hold-ups that come with card payments. Where’s your card? Can you read the long card number? Please hold while we verify with your bank… In fact, 9 out of 10 of consumers admit they have abandoned an online purchase due to a lack of payment options.


–Open banking–

Paying through open banking is a much more seamless process. Customers can typically pay in as little as three taps. No hunting down a wallet or purse, or having to authenticate through an app – just a simple and easy embedded customer experience.

As you can imagine, this can radically improve customer conversion rates. Plus, with additional dynamic payment options such as via QR codes and pay-by-link, the convenience and versatility of open banking is unmatched.


Why choose us?

There are an increasing number of open banking services out there, but we offer a completely integrated service – in-house, end-to-end. There’s also our integration team to get you up and running within just a few weeks.

We don’t just provide you with the connections to the bank and leave the rest up to you, we partner with you so that you can get the most out of open banking and the opportunities it brings to the SME market.


Get in touch today to find out exactly how much you could save in payments through open banking.