Starling, an app-based bank aims to give companies instant access to UK transaction systems
The digital bank’s new service enables other lenders and fintech companies to use its technology so they can offer their customers real-time payments through mobile phones or online.
New banks are usually routed through the established high street lenders in order to access the UK’s payment schemes, such as Faster Payments and BACs. They need access to be able to facilitate money transfers for their customers, ranging from direct debits to online payments.
But routing through a few high street banks makes it costlier and slower for new companies to provide payment services, as they are dependent on their larger rivals for connecting to the infrastructure.
Julian Sawyer, chief operating officer at Starling, said its service would give instant access so that other banks could offer their customers the ability to make immediate payments. “We believe that payments should be open, connected and always done in real time.”
Starling’s service is based on the technology that underpins the bank, which focuses on current accounts and money management tools. It will allow companies to connect to Faster Payments, so customers can send money instantly, BACs, which is used for direct debits, and MasterCard.
Opening up the UK’s payments systems is a key part of the regulator’s vision for boosting competition and innovation in the sector.
Mark Carney, governor of the Bank of England, announced plans to improve access last year that would allow companies providing payments services to tap into these systems rather than have to rely on traditional banks.
Vocalink, the company that operates the bulk of the UK’s payments infrastructure, recently launched PayPort, giving new banks access to the Faster Payments scheme.
Starling is one of a number of new banks based on mobile phone apps to have launched in the UK over the past year, following on from Atom Bank.
Founded by Anne Boden, previously chief operating officer at AIB, Starling offers current accounts that enable customers to see what they are spending by categorising payments, while providing tools to help budget and save.
Starling’s technology is designed so that it will be able to plug in additional services over time.
It works with TransferWise, to provide a money transfer service for customers to send payments from the UK to bank accounts in 35 currencies, including euros, rupees and dollars.
Source: https://www.ft.com/content/3778bbb6-31af-11e7-9555-23ef563ecf9a