As businesses seek to enhance their payment processes and improve the customer experience, Payment Links have emerged as a practical solution that cater to the needs of consumers and companies alike. Payment Links are becoming an effective tool in transforming how transactions are conducted, whether in retail settings, B2B environments, the lending sector, and more. By providing a seamless way to facilitate payments, Payment Links are becoming an integral part of the financial landscape in the UK, driving efficiency and convenience across sectors.
What are Payment Links?
Payment Links are unique URLs or QR codes that facilitate online transactions. Instead of relying on traditional point-of-sale systems, online shopping carts, or online payment pages, businesses can swiftly accept payments by sending links directly to their customers. When a customer clicks on the link, they’re directed to a secure payment page where they can complete the transaction using their preferred payment method.
How do Payment Links work?
- A business sets up a payment page with its chosen payment processing company.
- When a transaction is agreed upon, the business generates a payment link through a tool such as the Acquired.com Hub.
- The link is shared with the customer via email, SMS, or other platforms.
- The customer clicks the link or scans the QR code, leading them to the online payment page.
- The customer enters their payment details and completes the transaction.
Adoption of Payment Links in the UK
Adoption of Payment Links in the UK has seen significant growth in recent years, with digital payment methods becoming increasingly prevalent. While specific data on payment links is limited, we can infer their adoption through related trends in digital and Open Banking-powered payments.
In 2023, Open Banking payments saw substantial growth, with 130 million transactions recorded compared to 68 million in 2022, representing a year-on-year increase of 90%. This trend continued into 2024, with January seeing a record high of 14.5 million Open Banking payments, a 69% year-on-year growth.
The penetration of Open Banking among digitally active banking customers reached 14% in January 2024, meaning that 1 in 7 digital customers now has an active Open Banking connection or has made a payment using Open Banking. This marks a significant increase from 11% in June 2023.
The growth in Open Banking payments is also evident when compared to the overall Faster Payments system. By January 2024, open banking-initiated payments accounted for 4.3% of all Faster Payments in the UK, showing a steady increase in their importance within the country’s payment ecosystem.
Key benefits of Payment Links
Simplicity and Convenience: Sending a payment request is as easy as sharing a link, making the process user-friendly for both businesses and clients.
Flexibility: These links support various payment methods, from bank transfers to digital wallets and cards, catering to different customer preferences.
Enhanced Security: Transactions are processed through secure gateways, protecting sensitive financial information and building trust.
Improved Cash Flow: With immediate payment processing, businesses can access funds faster, keeping operations smooth.
Versatility: Payment links can be used across multiple channels, including emails, text messages, and social media platforms.
Payment Links across sectors
The versatility of payment links has led to their adoption across various industries. For example, in the retail sector, Payment Links have become a valuable tool for enhancing the customer experience and expanding sales channels. Retailers can easily incorporate payment links into their existing point-of-sale (POS) systems, mobile apps, or e-commerce platforms, ensuring a consistent and seamless payment process.
Companies in the Lending and Debt Collection verticals are also finding Payment Links useful for facilitating loan and debt repayments, offering their customers a more convenient and flexible way to make payments.
The future of Payment Links in the UK
The ongoing shift towards digital and contactless payments, accelerated by recent global events, suggests that Payment Links will likely see continued growth in adoption. As more businesses recognise the benefits of this payment method, we can expect to see payment links become a standard feature in the UK’s payment landscape.
By offering a blend of convenience, security, and flexibility, they are helping to streamline transactions and improve financial operations for businesses across the UK. As businesses continue to digitalise their operations, and customers demand convenience and flexibility, Payment Links are poised to play an increasingly important role across many verticals.
