What is Open Banking?
New EU standards, the second Payment Services Directive (PSD2), come into effect on the 14th September 2019. Open Banking complies to this legislation and provides the technical framework (APIs) meaning you can choose to share your bank account information securely and electronically with companies like Xero. It was designed to encourage competition in the banking industry, giving you more choice, as well as greater control of your data and how it’s used.
What does this mean for me?
To comply with the new requirements, many of Xero’s bank feeds will be replaced by new direct feeds using Open Banking. Existing Xero bank feeds with Barclays, as well as all UK and EU bank feeds set up using Yodlee, will no longer be available. Many of them will be replaced by new direct feeds using Open Banking.
If you’re currently using one of these feeds, you’ll need to change to the new direct feeds, where available. This will ensure your transactions can continue to flow into Xero each day (which makes life easier for everyone!).
New Xero feeds are safe, straightforward and free
The good news is, these new direct bank feeds are secure, easy to set up from inside Xero, and free. It should take less than five minutes to connect feeds with each bank.
The new feeds will be available for most UK banks and account types by 14th September 2019. However, some banks will be making feeds available at a later date, so some businesses won’t have a feed to connect to straight away.
In the interim, if you don’t have a new feed to connect to, you’ll need to manually import transactions into Xero or wait until a feed is available and backdate transactions. You will be able to import up to 12 months of historical transactions with the new feeds.
What else do I need to know about the new feeds?
There may be changes to any bank rules sent up, as the way the new feed imports information may be slightly different – therefore you may need to amend some of your rules.
As part of the new requirements, you will need to re-authenticate your bank connection every 90 days. Xero will remind you when you need to do this and it’s as simple as re-entering your online banking credentials. Whilst this is a little more admin, this is a new requirement under Open Banking.
Getting your business ready
The new feeds will be made available in stages, beginning in August. When it’s time to switch you’ll see a notification on your Xero dashboard, it’s a simple process.
We will be in touch with each of our clients to advise how they will be affected over the next few weeks.