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Open Banking

5 Benefits to your Small Business from using Open Banking

Open Banking for Small Businesses
Photo by: Гоар Авдалян

Small Businesses and Open Banking

3 Million customers in the UK have used Open Banking. Despite this many small business owners have not heard of Open Banking.

Why is this? Well it’s mostly because banks don’t want you to know about the benefits!

What is Open Banking?

Open Banking is a secure way to give Third Party Providers (TPPs) access to your financial information.

Open Banking was created to protect customers and spur innovation in Banking and Financial services. Open Banking provides a number of benefits to small businesses.

Benefit 1: Accounting Imports

If you use Xero or other similar accounting packages you may already be using Open Banking in your small business.

Open Banking is what powers and secures these financial management tools access to your banking transactions.

There are also a number of innovative Financial Management tools being developed on top of Open Banking. These are known as Account Information Service Providers (AISPs).

Benefit 2: Payment Matching

Authorised Payments Institutions can initiate payments from your customers (with their approval) to your account. The payments are made directly by bank transfer from your customers account straight to your account.

These payments can be initiated with a reference chosen by you, on the date you chose, with the amount you choose.

This vastly improves your matching and reconciliation process, reducing time and effort on your bookkeeping.

In the UK These bank payments usually clear in around 10 seconds so can be suitable for POS style checkouts.

Benefit 3: No Chargebacks

If you are a business taking credit and debit cards there are some huge improvements available for your business in moving away from card payments to direct bank payments.

Chargebacks are payment reversals triggered by Customers who wish to reverse a Card based payment. Sometimes known as Section 75 these leave the Merchant spending hours arguing and proving they deserve the customers original payment.

With Bank Payments there are no chargebacks.

Benefit 4: Reduced Costs

As well as savings on costs incurred from fraud and chargebacks, small businesses can save by reducing their merchant services fees, as there is no need for Card Readers and POS Terminals.

Savings can also be made on individual payment fees too. With Open Banking there are often reduced merchant fees due to the reduced Fraud and absence of acquirer, MasterCard and Visa fees.

Open Banking can support very large payments too often at reduced fees when compared to Card based payments.

Benefit 5: Improved customer experience

Since its launch in 2018 the vast majority of Banks now offer a very slick Mobile Banking approval process.

While online banking payments often need a card reader and your personal login details, Mobile banking initiated payments use biometrics including face ID an thumb prints to secure and simply approve access and payments.

Unlike Paypal, which has recently had to introduce SMS text messages to approve card payments, Open Banking payments can be approved using your Mobile Banking app. This is because your Mobile Banking app has built in 2 factor Authentication using device identifiers and Face Id, thumbprint or pin.


In summary Open Banking makes for a slick, efficient payment experience that can save you time and money accounting for your payments, leaving you more time to spend with your customers.

Robin Morris @

Paydog Ltd is fully Authorised Payments Institution FCA no 934908 offers immediate and recurring payment links and QR codes to SMEs powered by Open Banking.

How Paydog Works

Why Paydog

Making finance fairer for everyone

Paydog inspiration

In 1997, as a recently graduated student, I visited India with a friend. We were trying to catch a train to our next destination. Travelling by train in India at the time we met some amazing people, mostly families going to meet other extended family for various celebrations. The ticket office at the station was open, there were no queues, we had the money, there were seats available on the train – the train was actually in the station ….

India train

….but we weren’t allowed to buy a ticket. Tickets (for this specific interstate journey) were only allowed to be sold for the following days travel. You could not Buy a ticket to travel today! Those were the rules put in place, based on some policies (presumably to make sure noone overbooked)

Other than the obvious frustration of not being able to travel that day, what was worse was no-one in India at the time seemed to think this was a problem, or that things could or should be improved

Thankfully, India has been transformed and innovation is rife with individuals who know things can and should be better

23 Years Later…

With ‘Open’ Banking and Payment Services Directive 2 initiatives and implementations across Europe the same frustrations .

According to the European Payments Council “The Objective of PSD2 are to make payments safer, to increase the consumer protection, foster innovation and competition while ensuring a level playing field for all players, including new ones”

Subsequent lobbying by industry incumbants has meant:

  1. Existing Banks get automatic accrediation – hardly a level playing field!
  2. Credit and Debt Cards remain as insecure as ever – most of us have given our our CVV to many providers online or over the phone or at restraurants etc.
  3. Cards and telecoms are excluded from many of the provisions of PSD2 – protecting the incumbant Network providers
  4. Implementation delays and Banks dragging their feet in meeting regulatory deadlines
  5. Even UK Open Banking – one of the most open and innovative in europe still advises new entrants can take 3-12 months to get regulated

Having worked in finance and technology for many years we believe it is possible to properly meet the PSD2 Aims and Objectives for consumers

Our Mission

Offer individuals and small companies access to the same opportunities as large finance organisations


We aim to be the Amazon Web Services of the finance world

  • Federated not controlled
  • Extremely low cost of entry
  • Optimise for Volume not Scale – Pay for what you use
  • Low Friction, Automated Self service and intuitive to use
  • Technology for communication not control
  • Build a community
  • Make it compelling
  • Minimum Viable Product
  • Listen to customers
  • Agile : Fast and Good not slow and perfect – responding to change over following a plan


Paydog has started by registering as a TPP – Third Party Provider – AISP and PISP to allow access to accounts.

How Paydog Works


Paydog Limited has been created to become a Third Party Provider (TPP) of Payment Initiation Services (PIS) and Account Information Services (AIS).

These services are provided through a web-based application,, which will be offered to small business owners as a low cost solution to facilitating the making and receiving of payments without a card