In May last year cloud accounting company Xero added the ability for Xero users’ customers to pay online invoices sent through Xero. Xero Pay Now is a free service that attaches a merchant gateway to a Xero account, says Matt Vickers, Xero’s product manager for banking integration, says.
“If a business is using a merchant account and collecting payments from PayPal, they can connect it to their Xero account. Customers can send their payment details directly to PayPal to pay the invoice,” Vickers says.
Xero Pay Now could connect other merchant gateways such as Australian-based eWay and DPS Payment Express. (UK users could also use GoCardless and US users could use the Stripe gateway.)
Xero has marketed the Pay Now feature as a way for businesses to improve cash flow as it enabled customers to pay their bills immediately. The transaction automatically showed up in Xero’s accounts once the payment was processed and had reached the bank account.
Althought there were no additional costs from Xero, merchant gateways added their own fees and charges.
Xero told BoxFreeIT that the company was looking at bank to bank payments without a third party provider as the next stage of development. Xero users could effectively bypass third-party merchant gateways and their associated fees through a process resembling direct deposits.
“That is something we are exploring at the moment. We have a draft specification, which described the way in which a customer with an invoice from Xero’s customer’s will have the option to click Pay Now and be redirected to your bank, after authentication. Then the payment details are presented for review,” Vickers says.
“The process requires work from financial institutes in Australia and New Zealand, and we cannot reveal who the banks are until it’s live,” Vickers added.
Xero has created a video explaining how Pay Now works.
