Open Banking and Rent Collection: Cutting Arrears Without Chasing Tenants

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.

The three rails for rent in Ireland

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.

Reconciliation is the real prize

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. We covered why event-time data matters for reporting in our piece on NOAC reporting for local authorities.

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.

What tenants think

The honest answer is they barely notice. The tenant authorises a Direct Debit mandate once, and each payment collected through it is matched to its invoice automatically when GoCardless confirms it. If a payment fails, it is flagged and shows in arrears straight away.

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.

How Rentalize handles this for you

Rentalize Pay is the rent collection module, built on GoCardless Open Banking rails. It is available on Rentalize Core Growth and above, for property management companies, BTR operators, AHBs and local authorities. Tenants set up their Direct Debit mandate in the tenant portal, so there is no separate onboarding.

Frequently asked questions

Is Open Banking the same as direct debit?

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.

Is Open Banking payment regulated in Ireland?

Yes, under PSD2. Live since 2019. Providers must be authorised as account information service providers (AISP) or payment initiation service providers (PISP).

What does it cost?

Per-transaction fee, typically a fraction of card processing. The reconciliation savings usually exceed the fees in the first month.

Can a tenant cancel?

Yes, like any direct debit mandate. The operator gets immediate notification, which is itself a useful early warning of churn or financial distress.

Is it suitable for HAP / RAS tenancies?

Yes. Local Authority HAP payments and tenant top-ups can both run on the same rail, with reconciliation against the rent line.

How long does setup take for a 100-unit portfolio?

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.