What is Open Banking with August?

Managing rental properties involves countless financial transactions, rent collection, deposit transfers, expense tracking, and more. For decades, landlords relied on standing orders, cheques, or manual bank transfers, each with their own friction points and delays. Open Banking changes this fundamentally. Through August, landlords and tenants can initiate and receive payments directly between bank accounts with no fees, no delays, and complete security. But Open Banking is more than just a payment method. It represents a broader transformation in how property management works in the digital age.

This article explains what Open Banking is, how August uses it to simplify property management, why it's completely secure, and how it fits into the broader landscape of modern landlording.

What is Open Banking?

Open Banking is a regulated service that enables you to securely share your banking and financial data with authorised third-party providers. Introduced across the UK in January 2018 following the implementation of the second Payment Services Directive (PSD2), it has fundamentally changed how financial services operate.

The principle is straightforward. Your bank holds detailed information about your finances, including account balances, transaction history, regular payments, savings, and more. Traditionally, this data stayed locked within your bank's systems. Open Banking allows you to grant explicit permission for this data to be shared with regulated providers like August, creating opportunities for better financial management, faster payments, and improved services. August operates as as an agent of Plaid.

Crucially, you remain in complete control. You decide which providers can access your data, what information they can see, and for how long. You can revoke access at any time. The technology uses secure Application Programming Interfaces (APIs) to create encrypted connections between your bank and authorised providers. This is the same technology that banks use internally.

For landlords and tenants, this translates into practical benefits. No more chasing rent payments manually, no delays waiting for bank transfers to clear, no fees eating into already tight margins, and complete transparency about who has paid what and when.

How August uses Open Banking for property management

August is registered as a Payment Initiation Service Provider (PISP). This designation, regulated by the Financial Conduct Authority, means August can securely connect to your bank account and initiate payments on your behalf, but only when you explicitly authorise each transaction.

The process is designed for simplicity. When rent is due, the tenant opens the August app and selects the payment they need to make. August then securely connects to the tenant's bank. The tenant authenticates the payment using their normal online banking credentials (typically through their banking app with Face ID, fingerprint, or PIN). Once authenticated, the payment moves directly from the tenant's account to the landlord's account with no intermediaries.

For landlords, this means real-time visibility. You can see when rent has been paid, track outstanding amounts, and automatically reconcile payments against expected income. For tenants, it means no setting up standing orders, no remembering payment dates, and no worries about whether the payment has reached the landlord. Both parties receive notifications confirming the transaction, creating a clear audit trail.

This differs fundamentally from traditional payment methods. Credit and debit card payments involve card networks as intermediaries, which charge processing fees, typically 1.5% to 3% of the transaction value. Standing orders require manual setup and provide no confirmation of receipt. Cheques are slow, unreliable, and increasingly uncommon. Open Banking eliminates these issues entirely.

What if landlording just... worked?

See how

What if landlording just... worked?

See how

What if landlording just... worked?

See how

The security architecture of Open Banking

Security concerns are natural when discussing financial data sharing. The Open Banking framework was designed with security as the primary consideration, implementing multiple layers of protection that meet or exceed traditional banking security standards.

Bank-level encryption - All data transmitted through Open Banking uses the same 256-bit encryption that banks use for their own systems. This military-grade encryption renders intercepted data useless to anyone without the correct decryption keys.

Financial-grade API specifications - Open Banking uses Financial-grade API (FAPI) standards, which were specifically developed for high-security financial transactions. These go beyond standard API security to provide additional protections against sophisticated attacks.

FCA regulation - Every organisation that can access your banking data through Open Banking must be authorised and regulated by the Financial Conduct Authority. This includes ongoing compliance checks, security audits, and strict data protection requirements. August operates through Plaid Financial Ltd, an authorised payment institution regulated by the FCA (Firm Reference Number: 804718).

No password sharing - You never share your banking passwords with August or any Open Banking provider. Authentication always happens directly through your bank's own systems. When you initiate a payment, you're redirected to your bank's authenticated environment where you log in using your normal credentials. August never sees or stores these details.

Time-limited consent - When you authorise an Open Banking connection, you specify how long the provider can access your data. Connections can be one-time only for a single transaction or ongoing for regular payments or account monitoring. You can revoke consent at any time through your banking app or the provider's platform.

Read-only access for account information - When Open Banking is used for account information (rather than payment initiation), providers receive read-only access. They can view your transaction history and balances but cannot move money or make changes to your account.

Strong Customer Authentication - Every Open Banking transaction requires Strong Customer Authentication (SCA), which means at least two of the following: something you know (password or PIN), something you have (phone or security token), or something you are (fingerprint or face recognition). This multi-factor approach makes fraudulent transactions extremely difficult.

The UK's Open Banking Implementation Entity maintains a public register of all regulated providers, allowing you to verify that any organisation requesting access to your data is properly authorised.

Which banks and building societies work with August?

Open Banking coverage across the UK financial sector is comprehensive. All major banks and building societies support Open Banking connections, meaning the vast majority of UK account holders can use the service.

High street banks - Barclays, HSBC, Lloyds Bank, NatWest, RBS, Santander, and TSB all support Open Banking. These institutions collectively serve millions of customers across the UK.

Building societies - Nationwide, Yorkshire Building Society, Coventry Building Society, and others have implemented Open Banking functionality, ensuring members can access modern payment services.

Digital banks - Modern digital-first banks like Monzo, Revolut, Starling Bank, and N26 were early adopters of Open Banking and typically provide excellent integration with minimal friction.

Challenger banks - Metro Bank, First Direct, Virgin Money, and similar challengers support Open Banking as part of their digital-first service propositions.

The list continues to expand as smaller banks and specialist providers implement Open Banking capabilities. The Open Banking Implementation Entity maintains an up-to-date list of participating providers which currently includes over 300 regulated organisations.

If your bank is not yet supported, don't worry. The regulatory framework means all UK banks must provide Open Banking functionality. Smaller institutions may still be implementing their systems, but coverage will continue improving. In the meantime, most people maintain accounts with multiple banks, so you may find one of your other accounts already works with Open Banking.

How rent payments work step by step

Understanding the practical mechanics of Open Banking payments in August helps demystify the process. Here's what happens from initiation to completion.

Payment notification - When rent is due, both landlord and tenant receive notifications through the August app. Tenants see the outstanding amount and a prompt to make payment. Landlords see expected payments and can track which have been completed.

Initiating the transaction - The tenant opens August and navigates to the rent payment screen. They select the payment they wish to make and tap the pay button. August displays the payment amount, recipient details, and asks for confirmation to proceed.

Bank selection - The tenant selects their bank from the list of supported providers. This determines which banking app they'll be redirected to for authentication.

Secure authentication - August securely redirects the tenant to their banking app or online banking portal. The tenant logs in using their normal credentials (Face ID, fingerprint, password, or PIN depending on their bank's security setup). This authentication happens entirely within the bank's environment - August never sees or handles these credentials.

Payment confirmation - Once authenticated, the tenant sees the payment details displayed by their bank. They review the amount, recipient, and reference, then confirm they wish to proceed. This final confirmation ensures no payment happens without explicit approval.

Direct transfer - The bank processes the payment immediately, transferring funds directly from the tenant's account to the landlord's account. Because this is a direct bank-to-bank transfer with no card networks or intermediaries involved, the money typically arrives within seconds or minutes.

Real-time updates - Both parties receive instant notifications that the payment has completed. The landlord sees the rent payment recorded in their August dashboard, automatically reconciled against the tenancy. The tenant receives confirmation and sees their payment history updated.

Audit trail - August maintains a complete record of the transaction, including date, time, amount, and reference. This creates an automatic audit trail for both parties, useful for accounting, tax purposes, or resolving any queries.

The entire process typically takes less than a minute from initiation to completion, compared to several days for traditional bank transfers or standing orders.

Beyond payments - Open Banking for property management

While payment initiation is the most visible use of Open Banking in August, the technology enables broader property management improvements that benefit both landlords and tenants.

Automatic rent tracking - Once Open Banking connections are established, August can automatically identify rent payments as they arrive in your landlord bank account. Instead of manually recording each payment, the app recognises the transaction, matches it to the correct tenancy, and updates your records. This eliminates manual data entry and ensures your rent tracking is always current.

Expense categorisation - For landlord finances, Open Banking allows August to automatically categorise transactions from your bank account. Mortgage payments, insurance premiums, maintenance costs, and other regular expenses can be identified and filed appropriately, simplifying your bookkeeping and making tax preparation far easier.

Cash flow visibility - With permission to view account balances and transaction history, August can provide real-time insights into your property portfolio's cash flow. You can see at a glance whether rent income is covering expenses, identify properties that are underperforming, and make informed decisions about maintenance spending or reinvestment.

Tenant affordability checks - For tenant referencing, Open Banking enables much faster and more accurate affordability assessments. Rather than manually reviewing three months of bank statements and payslips, landlords can use Open Banking-enabled referencing services to verify income, confirm regular employment payments, and assess whether prospective tenants can afford the rent. This speeds up the letting process from weeks to days or even hours.

Fraud prevention - Open Banking data comes directly from banks, making it virtually impossible to forge. This addresses a growing problem in the rental market - fraudulent tenancy applications using doctored bank statements or fake payslips. According to industry data, fraudulent rental applications surged 140% in recent years. Open Banking provides landlords with verified, bank-sourced data that eliminates this risk.

Deposit transfers - Large sum transfers like security deposits can be handled through Open Banking, providing instant confirmation and eliminating the delays associated with traditional bank transfers. Both parties receive immediate verification that the deposit has been transferred and protected in the relevant deposit protection scheme.

Portfolio overview - For landlords with multiple properties, Open Banking connections across different tenancies create a consolidated view of your entire portfolio's financial health. You can see total rent collected, outstanding arrears, upcoming expenses, and overall profitability without manually aggregating data from multiple accounts and spreadsheets.

The cost advantage of Open Banking payments

One of Open Banking's most compelling benefits for property management is the complete absence of transaction fees. Traditional payment methods all carry costs that erode rental income over time.

Credit and debit card fees - Card payments typically incur merchant fees of 1.5% to 3%. On a £1,000 monthly rent payment, this represents £15 to £30 per month or £180 to £360 annually per tenancy. For landlords with multiple properties, these fees quickly become substantial.

Standing order costs - While standing orders themselves are typically free, they require manual setup by tenants, provide no confirmation of receipt, and don't automatically adjust when rent changes. This creates administrative overhead and potential for errors.

Payment processing platforms - Many property management platforms charge transaction fees, monthly subscriptions, or both. These costs accumulate across multiple tenancies and reduce net rental income.

Bank transfer delays - Traditional bank transfers can take several days to clear, particularly when sent late in the week or before bank holidays. This creates cash flow uncertainty and makes reconciliation more complex.

August's rent payments using Open Banking eliminate all these costs. Transfers are instant, free, and confirmed in real-time. The savings compound over time, particularly for landlords managing HMOs or larger portfolios with monthly rent collections from multiple tenants.

Consider a landlord with five properties, each rented for £1,200 per month. Over a year, this generates £72,000 in rental income. Using card payments with a conservative 2% fee would cost £1,440 annually. Over five years, that's £7,200 - money that stays in the landlord's pocket when using Open Banking instead.

Open Banking and financial inclusion

Open Banking offers particular benefits for tenants who might struggle with traditional referencing processes. The UK has approximately 5 million people with 'thin' credit files - limited or no credit history that makes traditional credit checks difficult.

This affects groups including young people renting for the first time, recent immigrants to the UK, people who have always used cash or debit cards rather than credit, those recovering from financial difficulty, and individuals who have been out of the financial system for other reasons.

Traditional referencing heavily weights credit scores and employment contracts, potentially excluding otherwise reliable tenants. Open Banking enables more nuanced assessment by examining actual banking behaviour rather than credit history alone. A tenant with no credit cards might have years of consistent income and regular bill payments visible through their bank statements.

This helps landlords too. Restricting your tenant pool to only those with strong credit histories limits choice and can extend void periods. Open Banking referencing allows you to assess a broader range of applicants confidently, identifying good tenants who might have been excluded by traditional checks.

Some Open Banking platforms now allow tenants to include rental payment history in their credit reports. This addresses a longstanding inequity - mortgage payments count towards credit scores, but rent payments historically did not despite being equally reliable evidence of financial responsibility. Open Banking is changing this, helping renters build credit history and improving their chances of eventually securing mortgages.

Integration with broader property management

Open Banking doesn't exist in isolation within August. It integrates with other property management features to create a comprehensive system for landlords.

Compliance tracking - When you pay for safety certificates, licensing fees, or insurance using Open Banking through August, these expenses are automatically recorded and linked to the relevant property. Your compliance checklist stays current without manual updates.

Maintenance coordination - When tenants report maintenance issues through August and contractors are paid via Open Banking, the payment is automatically logged against the repair ticket. This creates complete audit trails showing what was reported, when it was fixed, and how much it cost.

Tax preparation - Come tax time, having all your rental income and allowable expenses automatically categorised through Open Banking connections means your accounts are largely prepared already. Export financial summaries directly to your accountant or tax software without hours of manual reconciliation.

Document management - Payment confirmations through Open Banking create digital receipts that August stores alongside your other property documents. Need to prove when you paid for gas safety certificates or boiler repairs? It's all there in your document library with a clear payment trail.

Portfolio reporting - For landlords managing multiple properties, Open Banking creates unified financial reporting across your entire portfolio. See which properties are profitable, where maintenance costs are running high, and how overall returns compare to your projections. This informs strategic decisions about property improvements, rent reviews, or portfolio adjustments.

Tenant communication - When payments are processed through August using Open Banking, both parties receive clear confirmations. This reduces the common sources of landlord-tenant disputes - confusion about whether rent has been paid, when it was received, or which period it covers. Clear records prevent most payment disagreements before they start.

Privacy and data control

While Open Banking requires sharing banking data, this doesn't mean losing control over your financial privacy. The framework provides extensive controls ensuring you determine exactly what data is shared and with whom.

Granular permissions - You don't share your entire banking history with every provider. Instead, you grant specific permissions for specific purposes. A payment initiation request needs no access to your transaction history - it simply processes the approved payment. Account information requests can be limited to specific date ranges or transaction types.

Revocable consent - You can revoke Open Banking connections at any time through your banking app or the provider's platform. Once revoked, the provider loses access to your data immediately. This gives you ongoing control rather than permanent access.

Data minimisation - Providers can only request data they genuinely need for the service they're providing. Augustrequests rent payment access for tenants and account monitoring for landlords tracking expenses - not broad access to all your financial affairs. The regulatory framework enforces this principle of data minimisation.

Purpose limitation - Providers must use your data only for the purpose you authorised. August uses Open Banking connections for property management - rent payments, expense tracking, and related functions. Using that data for unrelated purposes would breach FCA regulations and data protection law.

Retention limits - Providers cannot hold your data indefinitely. Once the authorised purpose is complete or the access period expires, data must be securely deleted. This prevents accumulation of historical data that serves no ongoing purpose.

Transparency obligations - Providers must clearly explain what data they're accessing, why they need it, and how it will be used. This information must be provided before you grant consent, allowing informed decisions about whether to proceed.

These protections are backed by both FCA regulation and UK data protection law, creating multiple layers of accountability for any organisation handling your banking data.

The future of Open Banking in property management

Open Banking is still evolving, with new capabilities and applications emerging regularly. Several developments will further transform property management in coming years.

Variable Recurring Payments (VRPs) - This emerging Open Banking feature allows pre-authorised variable payments without needing manual approval each time. For rent payments, this could work like an intelligent standing order - automatically adjusting when rent changes, pausing when agreed, and providing full transparency to both parties. Several letting platforms have already begun implementing VRPs for rent collection.

International expansion - Open Banking is spreading globally. Europe has similar frameworks through PSD2. Australia, Singapore, and other markets are implementing their own versions. This could eventually enable seamless rent payments for international landlords or students, eliminating the complexity and cost of international transfers.

Open Finance - The next evolution extends beyond banking to include savings, pensions, investments, insurance, and mortgages. For property investors, this could mean comprehensive portfolio oversight including mortgage positions, rental income, capital values, insurance coverage, and tax positions all visible in one place.

AI-powered insights - As Open Banking provides richer data, AI can analyse patterns and provide predictive insights. Landlords might receive early warnings about potential arrears based on tenant payment behaviour, recommendations for optimal rent increases based on market data and tenant retention probability, or suggestions for property improvements based on comparable property performance.

Embedded payments - Future iterations may further reduce friction by embedding payments directly into tenant communication. Imagine receiving a rent reminder notification and completing payment with a single tap, without even opening the August app.

Regulatory developments - The UK Government continues refining Open Banking regulation. The Renters Rights Act and other housing legislation may eventually integrate with Open Banking frameworks, potentially requiring certain payment types or rental records to flow through regulated systems.

Common questions about Open Banking with August

Can my bank see what I'm using August for? - Your bank can see that you've authorised Open Banking access to a provider (August/Plaid) but not the specific details of what you're using the service for. They see outgoing rent payments as they would any other transfer.

What happens if I change banks? - You can connect multiple bank accounts to August. If you switch banks, simply add your new account and update your payment preferences. Previous payment history remains visible for record-keeping.

Does August store my banking passwords? - No. Authentication always happens directly through your bank's systems. August never sees, stores, or handles your banking credentials.

Can landlords see my full bank account? - No. Landlords receive confirmation of rent payments only. They don't access your broader banking data unless you're using Open Banking for tenant referencing, in which case you explicitly consent to sharing specific affordability information.

What if Open Banking connections fail? - Technical issues are rare but can occur. If an Open Banking payment fails, you'll receive an immediate notification and can retry or use an alternative payment method. August support can help troubleshoot connection issues.

Is my data sold to third parties? - No. FCA regulations prohibit unauthorised sharing of your banking data. August uses your data solely for providing property management services and cannot sell it to advertisers, brokers, or other third parties.

How long does August keep my banking data? - August retains transaction records for accounting and legal compliance purposes (typically six years for tax purposes) but does not indefinitely store your live banking data. Access tokens expire and must be re-authorised periodically.

Getting started with Open Banking in August

If you're new to August, getting started with Open Banking is straightforward. Download the August app from the App Store or Google Play, create your landlord or tenant account, and add your properties or tenancies.

For tenants, when rent payment is due, select the pay option and follow the prompts to connect your bank. You'll be securely redirected to your banking app to authorise the payment. After first-time setup, future payments are even simpler.

For landlords, you can optionally connect your bank account to enable automatic rent tracking and expense categorisation. This connection requires one-time authorisation through your banking app, after which August can monitor transactions and update your records automatically.

Both landlords and tenants benefit from taking a few minutes to explore August's broader features. Set up maintenance reporting so tenants can easily log issues. Configure reminders for certificate renewals and inspections. Upload key documents to the document storage so everything's accessible when needed. Use August Intelligence to get instant answers about your properties and obligations.

Open Banking transforms these features from manual tasks requiring regular attention to automated processes that happen in the background, giving you more time for the aspects of property management that genuinely need your attention.

Automate your rentals today

Get started

Automate your rentals today

Get started

Automate your rentals today

Get started

Why August's Open Banking approach works

Property management involves hundreds of small transactions and administrative tasks. Open Banking's real value isn't just making individual rent payments faster or cheaper - though it does both. The real value is eliminating the accumulated friction of dozens of manual processes that together consume substantial time and create room for error.

Every rent payment that self-processes, every expense that auto-categorises, every bank balance that updates in real-time represents time saved and accuracy improved. Multiply this across twelve months and multiple properties, and the cumulative benefit becomes substantial.

August leverages Open Banking not as a standalone feature but as foundational infrastructure enabling broader property management automation. This approach - using regulated financial technology to remove administrative burden while maintaining security and control - represents the direction modern landlording is heading.

The landlords who adapt to these tools now position themselves advantageously for an increasingly regulated, professionalised rental sector where efficiency and compliance separate successful portfolios from struggling ones.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.