Case studies

Wonderful’s A2A platform offers cost-effective payment processing for small firms  

03 July 2024

In 2016, Wonderful Payments launched as a fee-free fundraising platform for the collection of charity donations. However, although the platform’s reputation gained traction, more income simply meant more expense, and the cost of card processing constrained its impact and reach.  

To overcome this, the Wonderful leadership implemented open banking account-to-account (A2A) payments. This allows charities to offer open banking as a way to receive payments directly, without any ‘middle-man’, eliminating the card processing costs that had inhibited the platform’s growth.  

The platform has processed around £8 million in donations to date at no cost to charities, donors or fundraisers. Wonderful moved exclusively to open banking for donations in 2021, and interestingly, has already passed more money to charities via open banking transactions than it did via debit and credit cards in the preceding period. 

Wonderful CEO Kieron James is adamant that this approach to the third sector will remain central to the brand’s ethos. “The non-negotiable for us is that Wonderful will always be free for a charity. That will always be the case, and we live and die by it.” 

Open banking also appeals to donors because it can help reduce friction on payments and minimise security risks caused by manual errors. Donor and fundraisers are also confident that the total amount of cash given will go, in its entirety, to their chosen cause. 

Supporting small businesses 

The success of Wonderful’s A2A payments implementation prompted the organisation to consider other commercial opportunities that open banking could unlock. If open banking could reduce – or even potentially eliminate – card processing fees for charitable donations, could it be applied to corporate payments? 

Against the backdrop of the rise in the cost-of-living, Wonderful set out to bring the benefits of open banking to the small-to-medium-sized enterprise (SME) market with cost-effective payment processing and near-instant settlements.  

Wonderful worked on a series of integrations, from ecommerce platform WooCommerce to accounting software provider Xero, and went to market with a proposition for UK SMEs that, at the time of writing, allows them to process 2,000 monthly transactions for £19.99 per month, with each transaction outside the bundle charged at 1p.  

“We’ve made integration seamless with platforms such as WooCommerce and Xero (which also integrates with our own smartphone POS app), and we’re expanding to other third party platforms over the coming months. This will make it easier for SMEs to adopt our solution and thrive.”  

OBL support   

“The team at Open Banking Limited (OBL) have been fantastic with us,” Kieron remarked, “I can’t praise them highly enough. We held a launch day for WooCommerce developers, and an open banking spokesperson delivered a keynote speech explaining how payment processing fees can consume as much as 10% of annual net profit for one merchant. Our own research indicates this is closer to 18% for a typical UK SME. It helped to get the message out there that there is another way.”

“While open banking is great for the charitable sector, it’s also great for boosting SMEs’ margins. As word of its potential spreads, our ambition is to become the largest provider of open banking services in terms of registered customers.” 

Though still sustained through founder funding, Kieron is optimistic about Wonderful’s long-term potential. “People who know Wonderful love Wonderful, but we’ve never really had a marketing budget. Our growth has always been organic. Logically, we’ve gone about things in the opposite direction and worked hard to make payments as straightforward and slick as possible. 

“However, once people use open banking through our platform for the first time and see that it can be trusted, the marketing should all but take care of itself.”  

Building trust in the customer journey 

As with any new technology – especially one that deals with finances – the first interaction with a customer must cultivate trust. Kieron and the Wonderful team are working hard to get this right.  

“It’s a balance between introducing enough friction to the onboarding journey that a customer can trust our proposition but not so much that it becomes onerous. We’re doing everything we can to get that balance right.” 

He concluded: “Once the balance is there, the many benefits we can offer SMEs through open banking will be wrapped in that all-important layer of trust. At that point, there will be few limits to Wonderful’s potential.” 

Notes to editors

Open Banking Limited does not endorse any of the products or companies mentioned here.

If you would like to share your organisation’s experience of open banking, please email us at press@openbanking.org.uk. 

If you would like to talk to one of our team about how open banking could help your business, please email us at enquiries@openbanking.org.uk.