Case studies

Open banking for charities – JustGiving

15 February 2022

JustGiving is one of the world’s most well-known and trusted platforms for online giving. It helps people raise money for the charities and people they care about.

Since its launch in 2000, the platform has helped raise over £4.4bn for a variety of causes across the world.

A merchant of record, JustGiving works by processing a donation and aggregating funds to a recipient charity registered with the platform.

Before the advent of open banking, the majority of payments made via JustGiving were attributed to either PayPal, or a credit or debit card.

Today it is very much a mobile-first platform, with more than 85% of its donations made using a mobile phone or tablet.

And while 45% of traffic comes via traditional card payments, all other donations are made through digital wallets such as PayPal, Google or Apple Pay and now, crucially, open banking.

The cost of processing payments

In the past couple of years, JustGiving’s business model has changed radically. It is now run as a freemium platform, meaning when someone makes a donation, they are prompted to give a tip which goes directly towards the running of the service.

This ensures all donated funds go straight to the charity or cause, but comes at a cost risk to the platform.

And, like any merchant, JustGiving faces many challenges. These range from the cost of processing these payments, to cash flow and the ability to receive funds in a timely fashion (it still takes between three and four days), to the challenge of card fraud, and charge-back costs.

The open banking journey

Working with American Express’s Pay with Bank Transfer service, JustGiving began using open banking in Christmas 2019 and was the first merchant in the UK to use the technology.

Today open banking represents between 7%-8% of JustGiving’s share of wallet and its benefits are open to any organisation that chooses to use the platform for their charity. Oliver Shaw-Latimer, JustGiving’s Director of Global Fintech, said: “It is like open banking was made for charities.”

The benefits also help tackle a long list of historic challenges.

As money is pushed directly from a donor’s bank account, there is never an issue with insufficient funds. If the cash isn’t there, the payment can’t be made.

And when it comes to cashflow, it’s all taking place in real-time, at the same speed as if you were pushing through your banking app.

With no middleman, JustGiving is now seeing savings of 50%, as well as the displacement of more expensive payment options, such as mobile wallets.

Increased donations via open banking

Shaw-Latimer said: “The average transaction value is almost twice the amount of a regular donation. We feel it’s an indicator people will choose the open banking option when making large donations, for security and fraud reasons.

“We underline open banking as our preferred method. It’s quicker and cheaper, it’s mobile-centric, and the flow is smooth. Ultimately, once you’ve picked your bank, you’re set.”

And JustGiving believes the sector can play a role in the wider adoption of open banking payments among consumers.

Shaw-Latimer said: “Open banking is a seismic change in payments, and it’s particularly applicable to the not-for-profit sector. Charities are always looking to reduce fraud and get money sooner. It’s almost like it’s been designed for them.

“And I think it will follow a similar trajectory to contactless. JustGiving is viewed as the R&D department of the sector so often leads the way. Once adopted, charities will start to pick it up.

“It’s recently been adopted by HMRC too, which indicates that adoption is going up and more people will be using it in the next 12 months. In addition, usage seems to suggest the open banking-enabled payments also lead to higher donations.”

For JustGiving, the future is very much about expanding open banking options, including plans to make it available to personal crowdfunding pages, and rolling it out to support charities across Europe.

Disclaimer: The content of this article is based on a discussion with JustGiving and the Open Banking Implementation Entity (OBIE) to enable JustGiving to provide details relating its service offering for information purposes only. For more information on the use of our website see: https://www.openbanking.org.uk/terms-conditions/.

If you are a third party provider (TPP) and you would like to share your open banking story with us, please email marketing@openbanking.org.uk.