Case studies

Can open banking payment solutions help charities increase fundraising revenue?

10 February 2022

Like many organisations, many of the UK’s charities and social enterprises have been hit hard by the pandemic. Nearly two years of on-off lockdowns hit face-to-face fundraising events – a key source of revenue for many charities – and cash donations. Some struggled to retain volunteers, while others faced an increase in demand for their services.

Recent research from The Charities Commission reported that 60% of charities in England and Wales saw a loss of income, and one in four charities with incomes of less than £10k paused their activities completely during the first lockdown.

As charities look towards the post-Covid fundraising landscape, our new publication ‘The charities guide to growth through open banking’, highlights the opportunities offered by open banking payment solutions.

In the guide, we set out how third sector organisations can:

  • Intelligently increase revenue through lower fees
  • Enhance security and productivity
  • Embrace new digital payment preferences
  • Offer a more engaging donation journey that appeals to a millennial mindset.

Challenging perceptions

One of the barriers to introducing any new payment or donation method is the perception that it will be expensive and disruptive to day-to-day processes and tasks.

However, the reality is that most open banking applications are free to use and can be up and running within a few hours. All that’s required is an internet-ready device and an internet connection.

How can open banking help cut costs?

Traditionally, a significant portion of donation revenue goes towards individual transaction fees and annual service hosting costs. According to the business website,, each card transaction takes a typical fee of between 1-3% meaning processing costs can quickly add up.

In contrast, the cost of receiving payments via open banking tends to be far lower compared with credit or debit cards, online or in-person. This means more revenue going directly to their funds.

There is also often near-instant settlement and access to any money coming in. Thanks to the UK’s retail payments system, Faster Payments, transactions are typically completed within a few seconds meaning donations are on account and available typically more quickly than card-based payments.

What open banking can offer your supporters

Open banking can also present more flexible opportunities to donate, including micro-donations, where donors can opt to round up transaction amounts and give permission for the surplus (within agreed limits) to be transferred to their chosen charity.

The pandemic has also seen an increase in the use of QR codes, and using a QR code on a leaflet, magazine or billboard means a charity’s donation journey can start anywhere, without the need for specialist apps or a point-of-sale machine.

There are some additional benefits of using open banking too.  

Lack of middleman cuts costs and drives donations up

According to the charity platform JustGiving, it has found that, with no middleman, it is seeing savings of 50%, as well as the displacement of more expensive payment options, such as mobile wallets.

And the ability to donate direct – with the knowledge that all the donated funds will be going direct to the supporter’s chosen cause – has, in some instances, led to an increase in donations as well as cost savings.

The average transaction value is almost twice the amount of a regular donation. We feel it’s an indicator people will choose the open banking option when making large donations, for security and fraud reasons.

Oliver Shaw-Latimer, Director of Global Fintech, JustGiving

Shaw-Latimer concluded: “We underline open banking as our preferred [payment] method. It’s quicker and cheaper, it’s mobile-centric, and the flow is smooth. Ultimately, once you’ve picked your bank, you’re set.”