Changes to Bank Connections in the UK & EU
Later this year, you will see some changes in Wave due to the upcoming Open Banking regulations coming into force in the UK & EU. You can find our FAQ regarding these changes below. We have also updated our stance on supporting Making Tax Digital in the UK. You can find more information here.
If you have any other questions, please let us know by leaving a comment on this thread.
Will Wave be compliant with upcoming UK & EU Open Banking regulations?
No, Wave will not be compliant with UK & EU Open Banking regulations when they come into effect on September 14, 2019.
Wave’s bank connection feature will no longer be available to users in the UK & EU after Open Banking regulations come into effect in September.
What is Open Banking?
The Payment Services Directive 2 (PSD2) is regulating banks in the European Economic Area (EEA) to open their APIs to allow Third Party Providers (TPP) to access customer data and initiate payments. You can learn more about this in the Open Banking glossary.
The regulation aims to:
- Secure electronic payments using Strong Customer Authentication (SCA)
- Increase digital and online commerce
- Expand the scope of regulated payment transactions
- Enhance customer data rights
For this to happen in a secure and open way, financial technology companies like Wave must adhere to new regulations in order to continue using customers’ banking data.
Where is Open Banking being enforced?
Open banking only applies to UK and EU bank institutions. Wave will continue to use bank aggregation partnerships and internal products to automatically import bank feed transactions from any institution geographically outside of the United Kingdom and European Union.
Customers in other geographic locations (like the US and Canada) that connect to the United Kingdom or European Union bank institutions will also be impacted.
What is Wave's position on Open Banking?
We believe that Open Banking is the right way forward. As companies like Wave continue to strive toward bringing new financial products to the market, we believe that a customer’s access and control of their own financial data is crucial to unlocking innovation.
Why is Wave not supporting Open Banking?
The required operational & technology costs to support Open Banking for our free accounting platform are too high for Wave at this time.
Wave’s revenue comes from financial services based in North America. In order to ensure that we are able to make feature investments to our free accounting and invoicing platforms that bring value to users worldwide, we will continue to focus on growing our business in North America.
While we will no longer support automatic bank imports when Open Banking comes into force, users of our accounting product can still import transactions using statement uploads or Wave Connect.
What are the other solutions that you suggest?
If the automatic import of transactions through a bank connection is a mandatory requirement of your business’ bookkeeping needs, we understand. We’ve done our homework to see what some of our main competitors are doing to support Open Banking. Both Xero and Quickbooks have Open Banking support for their accounting products.
Will Wave ever support Open Banking?
Directives like Open Banking will be advocated and promoted into Canada and the United States in the next few years. Wave believes in these types of initiatives, so when it is timely to develop these features for the UK & EU, we will. As we decide on our international revenue strategy in the future, the United Kingdom and European Union are a critical component of that vision.
Is this Wave's choice or because of your data aggregation partners?
This decision is Wave’s choice. Our aggregation partners aim to support Open Banking, but the operational and technology costs we must commit to in order to become compliant are too high for Wave at this point in our accounting feature’s lifecycle.
When will I lose my bank connection?
Wave will automatically sever the connection to any impacted financial institutions that you have connected on or before September 14, 2019.
How is Wave communicating about this?
In June, we communicated directly with all customers in the UK and EU who have actively used our accounting features in 2019. We will begin showing further messages and notifications in the application through the coming months. As the final deadline approaches, we will send a communication to all users with an impacted bank connection to inform them about when we will disconnect their bank connection.
Does this mean I have to input transactions manually?
Once support for bank connections terminates, users can continue to input transactions into Wave and continue to use our accounting features. We offer a bank statement upload tool, as well as a Google Sheets integration called Wave Connect to allow users to upload transactions in bulk. Users can also enter individual transactions manually.
What does this mean for Wave's other free software?
There are no changes to the availability or functionality of any of Wave's other features. We know that Wave's free features offer incredible value to small business owners around the World. We'll continue to offer and improve our free invoicing and payments processing integration with Stripe in regions we currently support.
Does this change apply to payments processing with Stripe?
This does not impact Wave's integration with Stripe for payments processing.
I'd be willing to pay for these services, would you build it then?
Right now, the operational & technology costs of complying with these regulations in the EU and UK is not the right business decision for us.
In order to ensure that we are able to make feature investments while keeping our accounting and invoicing platforms free for users worldwide, we will continue to focus on growing our business in North America through our paid services in that region.
Is there any way to opt out of this?
No, there is no way to opt out of this change.
Are you doing this because the UK/EU isn't generating revenue?
Wave’s primary revenue comes from financial services based in North America. As we continue to evolve our international strategy in the future, the United Kingdom and European Union will be a critical component of that vision.