Accelerate Payment Collection: Embrace ‘Instant A2A Payments’ with GoCardless and Chargebee

Card payments have always incurred more processing fees than Account-to-Account (bank-based) payments. But with cards, you and your customers get the convenience of instant confirmation. You both know right away if the payment is successful, and if not, the customer can quickly try a different payment method and complete the checkout. 

This has always been a shortcoming for A2A payments, which usually take 3-7 days for payment confirmation. Hence, cards traditionally had the upper hand despite being more expensive. But what if paying directly from your bank account was as instant as cards but less expensive? 

Enter instant payments.

What are instant payments?

Instant payments are bank-to-bank digital payments processed in real-time throughout the year (24/7, 365 days), with the funds immediately available to you.

Open banking infrastructure makes this possible by facilitating real-time access to a customer’s bank account, enabling instant payment initiation and processing.

How do instant bank payments differ from other direct debit payments?

Conventional direct debit payments use Direct Debit rails such as SEPA, BACS, and BECS, while instant payment utilises different rails, such as Faster Payments in the UK, which are associated with open banking. This is the technical difference.

With conventional bank-to-bank payments (such as the SEPA or BACS Direct Debit), it can take 3-7 days to confirm whether your customers’ payment is successful. So if the payment is unsuccessful due to insufficient funds (for example), customers will be notified after 3-7 days and then have to retry payment using an alternate payment method. But with instant payments, they will be notified of the payment confirmation at the time of checkout itself. 

Benefits of instant bank payments

1. Real-time confirmation: Payments are processed and confirmed in real-time, making funds available immediately. This accelerates a lot of your downstream processes. If you run an eCommerce store, for instance, you don’t have to wait for a few days for the payment confirmation and then ship your products. You can ship instantly and delight your customers.
   
2. Reduced chargeback and failures: Since your customers have to log in using their bank account credentials and authenticate these payments (and given its instant confirmation), it highly reduces the risk of chargebacks and failed payments. If you’re a SaaS provider and you need to provision licensing based on the payment status, you can confidently do so without having to worry if the payment will fail later.
   
3. Reduced costs: As a bank-based payment method, instant bank payments incur lower transaction costs than credit card transactions, and can be up to 54% less expensive than online card transactions.
   
4. Enhanced transparency: Instant notifications and confirmations provide greater transparency and assurance for both you and your customers.

Instant bank payments offer the best of both worlds—they are as quick as card payments, as economical as other bank-to-bank payment methods, and are less likely to fail.

How you can collect instant payments with GoCardless & Chargebee

With a mission to make bank transfers faster, affordable, and more secure, GoCardless introduced Instant Bank Pay, its instant payment solution powered by open banking. 

Chargebee has partnered with GoCardless to offer our customers the convenience of collecting instant payments in addition to the conventional Direct Debit options. 

Instant bank payment methods supported by Chargebee

Chargebee supports the following payment methods for instant bank payments via the GoCardless integration:

• Faster Payments
• SEPA Instant Transfer
• PayTo

Faster Payments

Faster Payments is an electronic transfer designed to speed up the process of sending money within the UK.

Faster Payments allows you to collect instant one-off payments from customers in the UK. This means that your customers’ first payment will be processed instantly, while subsequent recurring transactions will be processed via BACS Direct Debit rails without any additional steps from your customers.

SEPA Instant Transfer

SEPA (Single Euro Payments Area) is a payment integration initiative that enables seamless euro transactions across European countries. Open banking enhances the efficiency and speed of these payments.

Currently, you can use SEPA Instant Transfer to collect instant one-off payments from your customers based in Germany. Similar to Faster Payments, your customers’ initial checkout will be processed instantly, and the subsequent recurring payments will be processed via SEPA Direct Debit rails.

PayTo

PayTo helps you collect instant payments from Australian customers. One major advantage of PayTo is that it can process both one-off and recurring payments for any payment use case. Hence, it offers a great alternative to BECS Direct Debit by providing faster settlement and better visibility over your payments.

In addition, if your customers change banks or bank accounts, their PayTo agreements go with them, reducing the chances of payment failures.

To recap, you can collect the first customer payment and any one-off charges through Instant Bank Pay and SEPA Instant Transfer. PayTo supports both one-time and recurring payments. In the rare event that your customer’s bank is not supported by GoCardless, the payment will go through the fallback mechanism automatically (that is, it will be processed as a regular Direct Debit payment via SEPA, BACS, or BECS, depending on your region).

	Direct Debit with Instant Bank Pay for first payment	Direct Debit
Bank coverage	99% PIS + DD fallbacks	100%
Instant confirmation of 1st payment	Yes	No
Biometric security	Yes	Not by default
Refunds	Yes	Yes

PIS = Payment Initiation Service; DD = Direct Debit

How to start accepting instant payments for your business

Instant payments take bank-based payments to the next level by leveraging open banking. With its round-the-clock availability, instant payment verification, and reduced costs, they pose a powerful alternative to card payments. 

Here’s how you can start leveraging instant payments:

1. Sign up for Chargebee
2. Sign up for GoCardless (If you already have a GoCardless account, you can enable these payment methods in the same account)
3. Connect your Chargebee and GoCardless accounts
4. Enable instant payment methods through Chargebee

Our team of experts is ready to help you with the entire process so you can sit back, relax, and start collecting instant bank payments.