Key takeaways
Arrears are not, in most cases, a tenant unwilling to pay. They are a payment that did not happen because something went wrong at the rails: a standing order amount mismatched the rent change, a card expired, a bank account closed without the tenant remembering they had a standing order on it.
If the operator finds out about a failed payment three weeks later, when the bank statement is reconciled, that is three weeks of arrears that were entirely preventable. The fix is not chasing harder. The fix is moving to a payment method that fails fast, surfaces the failure in real time, and gives the tenant a single tap to fix it.
That payment method exists. It is PSD2-compliant Open Banking, layered on top of SEPA Direct Debit. This piece explains how it works, what the rent collection numbers look like, and why every BTR and PMC operator we work with has moved to it.
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Standing order. Tenant sets the amount in their banking app. Operator never sees the failure. If the rent goes up, the standing order does not unless the tenant updates it. Most arrears at small landlords are caused by a stale standing order and not noticed for months.
SEPA Direct Debit. Operator pulls the money. Mandate signed once. Failures surface within days, but the operator only knows after the bank tells them. Moderate cost per transaction.
Open Banking direct debit. Tenant authorises the payment intent through their banking app at signature. Subsequent payments use the SEPA rail but with real-time failure notification and the ability to switch funding source without re-mandating. Lower failure rate, faster recovery, better reconciliation.
From Rentalize Pay customer data across BTR, PMC and AHB cohorts in 2025-2026:
The shift from standing order to Open Banking direct debit produces a 70-75% reduction in arrears. Even from plain SEPA the improvement is 30-50%. The difference is not the rail itself, it is the failure-handling pipeline that the rail enables.
Open Banking payments carry a tenancy reference end-to-end. When the payment lands, the housing system knows which rent line it relates to, automatically. Finance closes the line. Arrears reports refresh. NOAC indicators update. We covered that workflow in detail in our NOAC reporting piece.
Compare that to the standing-order workflow: bank statement arrives, finance officer matches deposits to tenants by amount and reference, kicks back exceptions, repeats. That is two days a month for a 200-unit portfolio. Eliminated.
The honest answer is they barely notice. The signature flow on a tenancy creation now includes a banking authorisation that takes the tenant 30 seconds in their banking app. Subsequent rent payments happen without input. If a payment fails, the tenant gets a same-day push notification with a one-tap retry.
The behaviour change that matters is not visible. It is the absence of a follow-up email two weeks later asking why the rent did not arrive.
Rentalize Pay is the rent collection module, built on GoCardless Open Banking rails. It is included in Rentalize Core for AHBs, LAs, BTR and PMC, and bundled with Rentalize 360 for 1-10 property landlords. Setup is signature-flow integrated, no separate onboarding for the tenant.
The arrears improvement is the headline metric, but operators tell us the bigger gain is the staff time eliminated from the reconciliation cycle.
No. Open Banking is the authorisation rail. The actual money movement still uses SEPA direct debit underneath, but with real-time visibility and re-authorisation that traditional SEPA does not have.
Yes, under PSD2. Live since 2019. Providers must be authorised as account information service providers (AISP) or payment initiation service providers (PISP).
Per-transaction fee, typically a fraction of card processing. The reconciliation savings usually exceed the fees in the first month.
Yes, like any direct debit mandate. The operator gets immediate notification, which is itself a useful early warning of churn or financial distress.
Yes. Local Authority HAP payments and tenant top-ups can both run on the same rail, with reconciliation against the rent line.
A week of operational onboarding, then a 30-day window to migrate tenants onto the new mandate at next rent change or annual review.
If you would like to see how Rentalize handles this in practice, you can book a 20-minute walkthrough. We will use one of your own properties as the worked example.
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