Thought Leadership

How open banking is helping businesses save this Small Business Saturday

30 November 2023
  • Minister Kevin Hollinrake MP celebrates the work of SMEs and encourages small businesses to consider adopting open banking this Small Business Saturday, 2 December.
  • 17% of UK SMEs are now using open banking.
  • Small business Williams Trade Supplies, a plumbers’ merchant, is one of those SMEs, saving the 10% of profit that card transactions were costing the business before offering open banking as a way to pay.

1 December 2023 – Small Business Saturday highlights the remarkable successes of small businesses up and down the UK. It encourages consumers to ‘shop local’ and support small businesses in their area. Many of these businesses are suffering due to cost of living challenges, however, the open banking revolution is making it easier for them to make cost savings as Kevin Hollinrake MP, Minister for Enterprise, Markets and Small Business confirms.

Minister Hollinrake said: “The UK’s small businesses are the lifeblood of our economy, playing a vital role in providing jobs and economic growth. Small Business Saturday is a chance to highlight the inspiring work of our small businesses and celebrate their success.

“Those firms using open banking-enabled services are able to make cost saving efficiencies through reducing late payments, managing their real-time cashflow, accessing cost-effective finance, and streamlining business administration. Open banking is an example of how innovative tech-based solutions can make a real difference for our hardworking SMEs.”

Kevin Hollinrake MP

Small businesses continue to lead the way in open banking adoption, with a record high of 17% of firms now making use of the innovative technology, often through cloud accounting software. The rapid rise in adoption is testament to the power of open banking technology to empower innovation, create efficiencies and reduce costs.

Williams Plumbing and Heating Supplies, a plumbers’ merchant based across the South East, Manchester, Milton Keynes, and Bristol, is one of thousands of traders now benefiting from open banking technology. The trade operation’s customer base is largely made up of what it calls the ‘one-to-five’ – that is, sole traders, and small independent plumbing companies employing up to five people, many of which are feeling the financial pinch.

The firm began using open banking payment solutions in 2021 as a way of cutting the cost of card payments and offering a contactless way to pay during the pandemic. Its popularity with customers – supported by the firm’s promotional incentives – means that it is sometimes the preferred way to pay in-store, as well as online, offering Williams significant savings on card fees. It also helps to overcome some of the security challenges with ‘card-holder-not-present’ transactions.

“Since introducing open banking as a payment option, we have saved a significant amount on card processing costs, which at one point were 10% of our pre-tax profit. While it is important to mark the successes of small businesses this weekend, it is also vital for firms to be able to save all year round, as well as increasing customer choice.”

Mike Mann, Finance Director, Williams

To the 83% of small businesses not already using open banking technology, Mann asked: “Why on earth wouldn’t you? If it takes off quickly, you will be glad you were in there early and understand how it can offer vital cost savings.”