GoCardless, Jellyfish Energy test recurring Pay by Bank

GoCardless and Jellyfish Energy have completed the first recurring Pay by Bank transaction in a live test with banks.

The transaction moves beyond the sweeping use of open banking payments introduced in 2022 by applying the model to commercial payments. It was processed on behalf of Jellyfish Energy, a UK business energy supplier that plans to offer the method to its business customers.

Recurring Pay by Bank lets customers approve ongoing bank-to-bank payments through open banking rather than card networks. In the UK, supporters say it could lower merchants’ transaction costs, speed up settlement and reduce failed payments, while letting customers manage or cancel authorisations in their banking app.

Jellyfish Energy plans to use the method to support flexible payment options linked to its rewards-based platform. The supplier, which serves small and medium-sized businesses, has built its model around rewarding reliable payment behaviour and giving customers more visibility over energy costs.

GoCardless has worked in account-to-account payments for more than a decade and has expanded into open banking in recent years. More than 37,000 organisations have used its open banking payment services alongside its broader direct debit and bank payment offering.

It has also been involved in earlier stages of the UK’s open banking payment rollout. In 2019, it processed what it described as the UK’s first live Variable Recurring Payment transaction in a sandbox environment, and it has since joined the list of approved open banking suppliers for central and local government.

Commercial shift

The latest test is notable because recurring Pay by Bank has largely been discussed in the context of sweeping, where customers move money between accounts they control. Extending that framework to merchant payments is seen by advocates as a necessary step if open banking is to become a more direct rival to established methods for regular billing.

GoCardless said its system includes a routing process that moves payers to Direct Debit where open banking is unavailable, aiming to widen coverage. It also highlighted a feature that uses historic payer data to help pre-fill payment details, and said the platform has recorded 99.5% uptime.

Those operational details matter in sectors such as energy, where regular billing, payment certainty and customer retention are closely monitored. Suppliers serving smaller businesses are particularly exposed to cash flow pressure and late-payment risk, making payment method choice more significant than it may appear at checkout.

“We’re thrilled to process the first live recurring Pay by Bank transaction with Jellyfish Energy, a major milestone as the industry prepares for the launch of this next-gen payment method. Recurring Pay by Bank offers a unique blend of speed, security and ease, helping forward-looking businesses like Jellyfish Energy unlock new revenue models, greater efficiency and best-in-class customer relationships,” Pat Phelan, Chief Revenue Officer at GoCardless, said.

“By leaning on our 15 years of experience in account-to-account payments, we can bring this technology to market with the proven reliability that businesses need. This will help them adapt with total confidence, knowing their payment operations won’t miss a beat,” Phelan added.

Energy use case

For Jellyfish Energy, the appeal is more predictable collections combined with a payment option that sits within customers’ banking apps. The company operates from Newcastle and also has offices in Edinburgh and Manchester, serving thousands of SME customers and working with more than 650 partners across the UK.

Its platform gives customers and partners visibility over payments, charges and ratings. That focus on transparency has become a point of distinction in a market where business customers often complain about complex billing and limited flexibility in payment terms.

“At Jellyfish, we’ve built our entire business model around rewarding reliable payment behaviour and giving customers real transparency and control over their energy costs. Recurring Pay by Bank is the next natural stage of that philosophy, giving our business customers flexibility and payment reliability that ultimately enables us to offer better rates,” said Aidon Hudson, Chief Executive Officer of Jellyfish Energy.

“Our industry is often seen as traditional and inflexible, which is why we’re excited to be at the forefront of bringing open banking payment solutions to the business energy sector, where they can deliver much-needed value to SMEs managing cash flow,” Hudson added.

The broader push behind Pay by Bank comes as the UK payments sector looks for alternatives to cards and, in some use cases, longstanding direct debit systems. GoCardless processes more than USD $130 billion in payments annually across more than 30 countries, giving it a sizeable base from which to test whether recurring open banking payments can move from industry pilots into routine commercial billing.