Bank transfers have long been a familiar way to move money between personal accounts. Whether you’re splitting the bill for a takeaway, helping a family member with rent, or paying your share of a group holiday, sending money directly from your account to someone else’s is commonplace in the UK.
But what about paying an actual business by bank transfer? While this method was typically reserved for paying local tradespeople, like your plumber or builder, this has now all changed. More and more businesses across various sectors are now accepting direct bank transfers from customers, especially in online transactions.
Throughout this article, we’ll explore the growing trend of business bank transfers in the UK marketplace and how they’re transforming the way we shop and pay for services.
How to pay a UK business with bank transfer
There are two main ways to transfer money directly from your bank to a business account in the UK – via dedicated payment gateways online or by setting up manual transactions. The method you choose often depends on your banking setup, the business requirements, and your personal preferences.
Online Payment Gateways
If you’re paying for an item online, then payment gateways have revolutionised how we transfer money from our bank accounts by creating a smoother and more integrated process. They act as intermediaries between your bank account and the business receiving your funds, eliminating the need to manually enter account numbers and sort codes.
Here’s how they typically work:
- Choose the bank transfer option at checkout
- Select your UK bank from the list of providers
- You’ll be redirected to a dedicated payment gateway
- Log in with your online banking details
- Choose which account to use
- Verify the details are correct
- Authorise the transaction
Once you’ve approved the transaction, the payment will be made, and you’ll be redirected back to the business website for their own separate confirmation.
Many businesses partner with different services to power their payment gateways, such as Trustly, Pay by Bank, or TrueLayer. However, despite having different names, the process remains the same for all.
Manual Payments
Despite technological advances, some businesses still require these transfers to be done manually. You’ll need to gather their banking details, including their business name, account number, and sort code, before you can set up the transaction.
Once you have this information, you can process the payment through your online banking portal by navigating to the payments or transfers section and entering these details. Alternatively, you can make use of telephone banking or visit your local branch in person.
Compared to payment gateways, manual transfers aren’t the most streamlined option, as it takes time to acquire and then input the banking details. You’ll also need to be particularly vigilant when entering the exact payment amount and any required reference so the payment can be matched to your order. Any errors can cause a delay.
Advantages for Consumers
With bank transfers evolving at such a scale, this has brought several significant benefits for UK consumers that weren’t previously available.
The most noticeable improvement is speed. Most UK bank transfers are now practically instant, whether processed through payment gateways or manually via the Faster Payments system. This means when you pay a business this way, the transaction typically settles within seconds rather than the days it once took. This has transformed it into a genuine option for paying for goods and services.
Another major advantage is simplicity, as you don’t need to create or maintain any separate payment accounts. Everything happens directly through your existing online banking, eliminating the need to remember additional passwords or manage funds across multiple platforms. Your online banking app or website is all you need.
These improved efficiencies have led to widespread adoption by businesses across diverse industries. A great example is within online gambling, as there has been a huge surge in players using bank transfers to deposit and play slots and games in recent years. This is according to Banktransfercasino.co.uk, the main resource for players looking for a bank transfer casino in the UK. Gamers are now much more relaxed about using their banking accounts to fund online gambling due to the added benefits.
Business Benefits
For businesses, accepting bank transfers offers unique advantages that contribute to smoother operations and improved financial management.
Security is a good example, with these transactions providing robust protection against fraud. Unlike some payment methods, the funds are securely deposited into the business account with minimal risk of chargebacks or payment disputes. Downtime is also extremely rare, so there’s very little chance of payments being missed this way.
If offering payment gateways, this process eliminates the need for businesses to share their banking details directly with customers. Additionally, these systems typically preset the exact payment amount, preventing the common problem of customers accidentally transferring incorrect sums, which then costs resources to sort out.
From a financial perspective, transfers from banking accounts typically carry lower processing fees compared to many other digital payment methods. While costs vary between providers, businesses generally save on transaction charges overall. Over extended periods, these savings can be especially significant for small and medium enterprises where margins matter.
How popular are business bank transfer payments with UK consumers?
Many British people have started to realise the benefits of paying businesses by bank transfer. This was made clear after it was revealed that the option to Pay by Bank has firmly established itself as one of the top three payment methods in the UK, with particularly strong adoption among younger generations. This is according to Thebanker.com, a leading authority on global financial analysis.
Looking towards the future, it’s difficult to imagine banking payments ever completely dominating the UK payments market outright. There’s simply too much competition and variety within the ecosystem for any single method to achieve total market control. Credit cards, digital wallets, and other emerging payment technologies all maintain distinct advantages for specific use cases.
Nevertheless, bank transfer technology has advanced tremendously in recent years and offers compelling advantages over these many alternatives. The strong adoption rates among younger consumers position this payment method well for continued growth. With further technological improvements, such as even greater streamlining of the payment journey, bank transfers could convince even more people to make the switch and cement their position as a major player in the UK payments landscape for years to come.