Hargreaves Lansdown offers instant money transfers


Clients investing through Hargreaves Lansdown can now make instant payments to and from their bank account directly, reducing the time it takes for deposits and withdrawals to clear by days.

New ‘pay by bank’ service uses open banking technology to allow customers to authorize payments in their banking app or online, eliminating the need to enter card details, logins or passwords .

This means that investors who deposit money can invest it the same day, allowing retail clients to buy stocks, funds or investment trusts more quickly and with less risk of price changes before purchases can be made.

George Rodgers, senior product manager at Hargreaves Lansdown, called the new payment method “a step change in the payment experience”.

He said: “Our customers can expect a smoother payment journey as well as instant settlement of deposits and withdrawals compared to days in the current system.”

What is payment by bank?

Bank payment services use the open banking framework to connect accounts held with different companies. Using an API feed, authorization can be granted and money transferred instantly from one account to another when making purchases or depositing funds.

The connection is encrypted and completely secure, allowing payments without customers needing to share their bank details with third parties.

In theory, this makes fraud much more difficult because confidential information is not exchanged.

How to use payment by bank?

Paying by bank is a relatively new method of payment, made possible only after the adoption of open banking standards that have been gradually introduced over the past five years.

Not all banks and current account providers offer the service yet, although HSBC and Barclays were early adopters.

If your bank offers a pay-by-bank option and the retailer or vendor you want to transact with offers the service, you can select that as your payment method during checkout.

This means you don’t need to create an account with the retailer you want to buy from, saving you the hassle of remembering long lists of login usernames and passwords.

Paying by bank also bypasses card networks and interchange fees, saving money while making the payment experience much simpler, faster and more secure.

Hargreaves Lansdown has partnered with Ecospend to support the new service from today. The tech firm won the largest open banking deal with HMRC in early 2021 and is now processing payments for self-assessment, VAT, corporation tax and PAYE.

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