When it comes to payments, traditional methods, including cards, Direct Debit and cash remain vital. However, they can be costly, administratively heavy and in some cases slow to reconcile. Missed or delayed payments directly impact cash flow, arrears management and ultimately the important services housing providers can deliver to residents.

Payment Initiation Services (PIS), enabled through Open Banking, are a modern alternative: secure, real-time, account-to-account payments authorised directly by the customer through a seamless, digital user experience. 

Rising cost pressures

As housing associations face ongoing financial strain from rising maintenance costs, new regulatory requirements, retrofit programmes and development commitments, reducing transaction fees and operational inefficiencies has become a priority. 
Card payments are convenient but carry large processing fees, particularly within the housing sector where the average transaction value is high. Manual bank transfers don’t incur these fees but they can be difficult to reconcile and time intensive. Every penny saved in payment costs can be redirected into housing services.

Arrears and income certainty

Income collection is the financial backbone of housing providers. Delays, failed payments and lack of visibility create risk and administrative burden. Real-time confirmation of authorised funds can strengthen arrears management processes and enhance efficiency.

Customer expectations are evolving

Customer increasingly expect simple, digital-first payment journeys, which reflect other areas of their lives. Many are comfortable using mobile apps, prefer not to manually enter card details online and don’t carry their card with them anymore. Offering “Pay by Bank” aligns with changing behaviour and reflects the direction payments is taking more widely.

Security and fraud awareness

As digital channels grow, so does fraud risk. Housing providers need to ensure that payment methods are secure, compliant and protect both customer and organisational data.

It’s an Open Banking service that allows a business to request a payment directly from a customer’s bank account, with their explicit consent.

Instead of entering card details, the tenant selects “Pay by Bank”, chooses their bank, and is securely redirected to their online or mobile banking platform to authorise the payment.

Once approved:

• Funds are transferred account-to-account
• Authorisation happens in real time
• Settlement typically occurs within two hours
• Strong customer authentication (SCA) protects every transaction

There are no card networks involved and no sensitive card data stored or shared.

Lower transaction costs

Card processing fees can be significant, especially when collecting high-value rent payments. Payment initiation is a cost-effective alternative because it enables direct bank-to-bank transfers without some additional fees.

When you’re collecting thousands of payments annually, even slight reductions in per-transaction costs can mean substantial savings.

Real-time payment confirmation

Authorisation is instant and confirmation takes seconds, which:

• Improves cash flow
• Enables faster allocation and reconciliation
• Increases visibility of payments being made

This means housing teams can be more efficient in who they actively chase for arrears because they have a real-time view of who has made payments and across what channel.

Reduced payment failures

Because tenants authorise payments directly within their banking app:

• There is no risk of incorrect card numbers
• Expired cards are eliminated
• Strong customer authentication reduces fraud risk

So fewer failed transactions and less follow-up needed.

Improved tenant experience

Pay by Bank offers a seamless, secure and familiar journey:

• No need to enter long card numbers
• No sharing of sensitive card data
• Secure authentication within the banking app

For many tenants, it’s already a natural, trusted and accessible payment method.

Enhanced security and compliance

Payment initiation is regulated under the Payment Services Regulations 2017 and operates within the UK Open Banking framework.

Payment Initiation Service Providers (PISPs), ensure:

• Strong Customer Authentication (SCA)
• Secure redirection via regulated banking channels
• No storage of card details
• Alignment with modern regulatory standards

This supports governance and risk management objectives within housing organisations.

Flexible integration for housing providers

Housing providers have varied tech, from legacy housing management systems to modern digital portals and everything in between, so PIS offers:

• API-first integration with developer documentation
• Branded, white-label payment journeys
• Dashboard tools for reporting and reconciliation
• Low-code and plug-in deployment options
• Integration with portals, CRMs and ERP systems

Typical integration times are short, so housing providers can adopt Pay by Bank without disrupting core operations.

For housing providers, income collection is not just an operational function, it is central to delivering safe, sustainable homes and supporting communities.

As financial pressures and digital expectations continue to evolve, adopting modern, account-to-account payment solutions is becoming a strategic necessity rather than a future consideration.

A payment initiation service enables housing providers to modernise with confidence, improving operational efficiency, strengthening income certainty and delivering a payment experience aligned with the way customers bank today.