Pay by bank links for trades: setup with Stripe or GoCardless, fees, refunds and clean Xero/QuickBooks reconciliation

Category: Integrations • Niche: payments, open banking, Stripe, GoCardless, Xero, QuickBooks

Contents

• Quick answer
• Who this is for
• Why pay by bank is trending now
• Provider options in the UK
• Step-by-step: Stripe Pay by Bank
• Step-by-step: GoCardless Instant Bank Pay
• Xero/QuickBooks reconciliation that actually matches
• Refunds, chargebacks and disputes
• Security: Confirmation of Payee, SCA and Faster Payments
• FAQs

Quick answer

• Pay by bank lets customers pay straight from their banking app using open banking. Fees are usually lower than card, payments confirm in seconds, and there are no card-style chargebacks.
• Best fit for UK trades: send a payment link by text or WhatsApp and get instant bank transfer. Use either:
  • Stripe Pay by Bank: shows alongside card in Checkout/Payment Links. Good if you already use Stripe. See Stripe docs.
  • GoCardless Instant Bank Pay (IBP): built for account-to-account, integrates well with Direct Debit and Xero/QB. See GoCardless pricing.

Who this is for

• Small contractors and service trades who:
  • Want cheaper fees than card readers for larger invoices.
  • Take remote payments via quotes/invoices or on-site by link.
  • Need clean reconciliations in Xero or QuickBooks.

Why pay by bank is trending now

• Open banking adoption is accelerating in the UK, with more firms offering account-to-account payments and clearer rules from FCA/PSR. See Open Banking UK and FCA statement.
• Benefits for trades: lower fees vs cards, instant confirmation over Faster Payments, fewer disputes, and no typing card numbers.

Provider options in the UK

• Stripe Pay by Bank

  • Real-time, open banking payments in GBP via Faster Payments. Works in Payment Links and Checkout when enabled. Docs: Stripe Pay by Bank.
  • Pricing is by quote. Third-party comparisons show lower than card fees, but confirm with Stripe for your volume.

• GoCardless Instant Bank Pay (IBP)

  • One-off account-to-account payments over Faster Payments. Pricing is transparent on site; typically around 1 percent + a small fixed fee per transaction, capped. See GoCardless pricing.
  • Sits nicely next to Direct Debit for repeat work.

• SumUp/Zettle/Square

  • As of writing, these focus on card and Tap to Pay. SumUp exposes open-banking features for account access, but not a mainstream UK “pay by bank” link like Stripe/GoCardless for merchants.

Step-by-step: Stripe Pay by Bank

1. Enable it

• In Stripe Dashboard, go to Settings Payments Payment methods. Turn on Pay by Bank for GBP.
• If you use Payment Links, it will appear automatically alongside card where eligible.

2. Create a payment link

• Products Payment Links New. Enter amount, description and customer email.
• Copy link and send by WhatsApp or SMS.

3. Customer journey

• Customer taps link chooses Pay by Bank selects their bank confirms in their banking app you see an immediate “processing” then “succeeded” state.

4. Payouts

• Funds settle to Stripe per your normal payout schedule. You’ll see Pay by Bank in the payment detail.

5. Xero/QuickBooks notes

• If you use Stripe’s Xero/QB integrations, Pay by Bank settles like card. You can also export Stripe Payouts and use bank rules to match fees and net.

Step-by-step: GoCardless Instant Bank Pay

1. Turn on IBP

• In GoCardless, enable Instant Bank Pay in your settings. Confirm your GBP bank account for payouts. See IBP support guide.

2. Create and send a link

• From a payment request or invoice, create an Instant Bank Pay link. Share by WhatsApp/SMS.

3. Customer journey

• They choose their bank, approve in-app, and you get instant confirmation. Settlement is typically same business day if approved before the morning cut-off.

4. Payouts and fees

• Fees show on your GoCardless payout; refunds attract a small extra fee. Pricing: GoCardless pricing.

5. Xero/QuickBooks notes

• Use the GoCardless Xero/QuickBooks integration so IBP receipts arrive against the right invoices. For deeper control, their Payout and Payout Item exports make reconciliation straightforward.

Xero/QuickBooks reconciliation that actually matches

• Xero

  • Stripe: Use the Stripe bank feed or the Stripe integration to create bank rules that split fees and net. Reference the Payment ID in the Xero reference field for a clean audit trail.
  • GoCardless: Install the GoCardless app for Xero so payments auto-allocate to invoices and match payouts. If you export a payout CSV, post a clearing account journal to mirror fees and net.

• QuickBooks Online

  • Stripe: Connect the Stripe app; enable deposit detail so you can match batched payouts. Use banking rules to post fees to a “Merchant fees” expense with 20 percent VAT code if applicable.
  • GoCardless: Connect GoCardless for automatic invoice matching. For manual control, create a GoCardless Clearing account; receive payments to it, then match to payouts and post fees.

• Tips

  • Keep separate clearing accounts for Stripe and GoCardless so statements read cleanly.
  • Add the payment link URL or payment intent ID into the invoice notes for dispute prevention.

Refunds, chargebacks and disputes

• Pay by bank is a push payment with Strong Customer Authentication, so there’s no card-style chargeback flow. You can still refund the customer from your provider dashboard.
• Stripe: refunds are allowed for up to around two years; processing fees aren’t returned. See Stripe Pay by Bank docs.
• GoCardless: refunds supported; a small fee applies and original fees are not returned. See GoCardless IBP terms.

Security: Confirmation of Payee, SCA and Faster Payments

• The customer approves in their own banking app using Strong Customer Authentication (biometrics/PIN).
• Confirmation of Payee helps prevent misdirected payments. Background: Open Banking UK on CoP.
• Transfers run on Faster Payments, so you get real-time confirmation and fast settlement. See HSBC Open Payments.

FAQs

• Does pay by bank work for deposits and stage payments? Yes. Create a link for each stage. In Stripe, you can save a customer and issue multiple links. In GoCardless, keep Direct Debit for recurring work and use IBP for one-off deposits.

• Can customers pay in person? Yes. Open the link on your phone and hand it to the customer, or display a QR code they scan. The payment still happens in their banking app.

• Can I accept international payments? Pay by bank here is GBP and UK-bank focused. For non-UK customers, keep card or bank transfer options.

• What about variable recurring payments (VRP)? VRP is growing in the UK. For now, most trades will use one-off pay-by-bank links for deposits/balances; keep Direct Debit for true recurring.

• How do fees compare to cards? Typically lower. Stripe pricing varies by deal; GoCardless posts transparent fees with caps. Run your own maths using your average invoice value.

• Any downsides?

  • Some customers will still prefer card or cash. Offer both card and pay by bank in your links.
  • Limits per payment may apply by bank/provider; for very high values, bank transfer or Direct Debit may be better.

• Where can I learn more?

  • Open Banking UK
  • Stripe Pay by Bank
  • GoCardless Instant Bank Pay

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