Today, open banking pioneer Nuapay, a Sentential company, announces its partnership with Felloh!, UK-based startup with a mission to transfer £1bn in reduced payment processing costs to donations for charities and social enterprises. The partnership enables social enterprise Felloh! to premier its open banking payments button. The new solution will enable consumers to effortlessly donate to charities, with over 50% of beta testers finding it easier to use than PayPal.
In 2019 alone, the UK’s total B2C e-commerce market reached £233 billion, of which £2.33 billion was lost in processing costs and card fees (using a conservative estimate of 1% of total transaction value). 2018 saw £10.1 billion given to charities in the UK, meaning £101 million was lost in fees and costs instead of contributing to charitable services.
Any charity could share a list of services - including calls with vulnerable people, food for the hungry or education for the young - where this money could have been better spent. With a third of charity supporters in the UK having donated more money than usual during the COVID-19 crisis and an uncertain economic climate it's crucial for the third sector to be able to fundraise efficiently.
Founded by a group of furloughed entrepreneurs, Felloh!’s new open banking based solution will charge charities 80% less than other online donation platforms - already attracting the attention of the Spotlight on Africa.
By utilising Nuapay’s FCA regulated open banking payment platform, Felloh! can strip out avoidable processing costs charged by card schemes and enable a higher percentage of donations to be received by charitable causes. A £50 donation made on the Felloh! website incurs a 25p processing cost, in contrast to the incumbent fundraising websites, which charge £1.15 on the same donation to cover payment processing. Payments are transferred in real-time and reconciliation is fully automated, reducing the administrative burden on charities and social enterprises. Charities can also opt to have GiftAid automatically calculated in a HMRC-friendly presentation.
In addition, the Felloh! pay button can be integrated into charities’ and retailers’ websites. Consumers can donate directly to charities by choosing the Felloh! Button on their website and approving the payment in their banking app in seconds. This creates a smoother and faster donation experience, ensuring that more of the donation goes to the chosen charity.
On retailers’ websites, consumers can choose to checkout with the Felloh! Button. This not only enables a low-friction payment experience for shoppers, but allows retailers to reduce their payment processing costs by avoiding card scheme fees. For every payment taken online, 10p will be diverted to an escrow account for their selected charity. SMEs or charities in offline environments can also collect payments via QR codes, which consumers scan using smartphones. This reduces upfront costs for SMEs, as they no longer need to invest in costly hardware card terminals.
Using Nuapay’s platform, all transactions will be fully Strong Customer Authentication (SCA) compliant, reducing the risk of fraudulent transactions for both charities and consumers.
Will Bicknell, Founder at Felloh! said: “We asked beta testers if they would use the Felloh! button as a payment method for online goods and an astounding 96.8% said yes. This confirmed our mission was one of longevity, and not just a lockdown project. Our pursuit is to change the way people make digital payments while simultaneously providing a better donation platform for social enterprises and charities. We selected Nuapay as our partner due to its extensive functionality and service levels - no other platform could also provide current accounts for charities to manage their donations through.”
Nick Raper, Head of UK at Nuapay, said: “We’re always delighted to be presented opportunities with charitable agendas and when Felloh! approached us we immediately recognised its potential. The work Felloh! is doing will go a long way in demonstrating the capabilities of open banking platforms while revolutionising the way charities are able to accept donations.”
Robin Bradley, Trustee of Spotlight on Africa, said: “Working with Felloh! means for every £30 donation we save transaction costs that can provide an extra 3 meals to the children we support in Uganda. We are also excited about a new source of donations via their payment button with retailers and delighted to be one of their earliest partners.”
Itself a social enterprise, once Felloh! has covered its own costs it will give a minimum of 50% of profits to charitable causes.