Open Banking refers to the use of open APIs that enable third-party developers to build applications and services around financial institutions’ data. It can be a great opportunity and tool for all sorts of industries. Here are some ways in which Open Banking can benefit the charity sector specifically.
Increased Transparency
Open Banking can provide charities with a more transparent view of their financial transactions. By accessing real-time data through open APIs, charities can monitor their finances more effectively and make more informed decisions.
Faster Payment Processing
Open Banking can also help charities receive donations more quickly. Rather than relying on traditional payment methods that can take several days to process, charities can receive payments instantly through Open Banking APIs.
Improved Fundraising
Open Banking APIs can also help charities create more effective fundraising campaigns. Charities can use Open Banking data to better understand donor’s behaviours, preferences and donation history. With this information, they can tailor their fundraising campaigns to better engage donors and increase donations in the future.
Reduced costs
Open Banking can help charities save money by automating financial processes such as payment processing and reconciliation. This can free up resources that charities can use to focus on their core mission.
Fee free fundraiser
When fundraising, people want to know that as much of their donation as possible is going to the cause and not to a load of intermediaries and third parties for processing fees. Through Open Banking, these transaction fees are kept to a minimum, meaning more of the generation donations end up where the money is most needed.
Flexibility
Without the need for a POS, asking for donations is a lot simpler. No need for card machines or relying on people to carry cash on them. Simply send donators a payment request via Paylink or QR code and the customer just needs to accept and complete the payment in a matter of clicks.
Improved Security
Open Banking payments mean the customer is paying directly from their bank account without the need for any other parties. Not only is this quicker and simpler, it means the charity does not need to hold any sensitive information on the client. This reduces administrative time and costs as well as minimising any security risks that come with traditional methods of donating.
Real-Time Payments
As the payment process through Open Banking is streamlined and fast, companies have a real-time view of the payments, which is ideal for all industries, especially charities undertaking fundraising campaigns. Keeping track of how well the campaign is doing and how far they are to hitting their goal makes the fundraising process that much simpler and more enjoyable.
No Risk Of Chargebacks And Unnecessary Admin
When payments are made through credit cards, there is always a risk of the transaction failing which is both time-consuming for the charity to fix as it involves additional admin tasks, but also can lead to charges – taking away money being raised. Open Banking eliminates the risk of chargebacks, meaning a more frictionless payment process and more importantly, increasing the money raised.
Better Collaboration
Open Banking can also enable better collaboration between charities and financial institutions. Charities can work more closely with banks and other financial institutions to develop innovative solutions that address the sector’s unique challenges.
Overall, Open Banking can provide the charity sector with greater transparency, faster payment processing, improved fundraising, reduced costs and better collaboration. These benefits can help charities operate more efficiently, raise more funds and achieve their goals more effectively.
