A new way to pay in the UK
NatWest joined Clydesdale Bank as the first few banks to offer a welcomed alternative to the UK payments space. This service, introduced by Clydesdale Bank in late 2014 and NatWest at the end of June, allows customers to make a payment of up to £250 to a new payee, so long as they have a UK bank account, without any authentication. The functionality offered by these two banks provides greater convenience when compared to existing functionality. For example, Lloyds Banking Group allows its customers to set up new payees in the app, however they must undergo telephone authentication. By adding this functionality, NatWest and Clydesdale Bank have become competitors to two other payment propositions.
The first is PayM, a service that allows customers to send money via SMS. NatWest does not allow customers to send money via PayM and the newly launched payment option addresses the PayM pain point of registering a phone number within online or mobile banking in order to use the service. Another point of friction is that a sender must know if the payee is signed up for PayM. NatWest and Clydesdale Bank bypass this with the fact customers only need to enter the sort code and account number with no registration required from the recipient. Going forward, it will be interesting to see if banks that currently offer PayM will add this functionality as well. And if so, how will this will impact the transactions processed that go through via PayM?
The second is Barclays Pingit. The app, available to both customers and non-customers of Barclays, allows users to send and receive money with a mobile number or Twitter handle. The app also allows customers to make charitable donations and payments via QR codes. Pingit requires extensive registration – customers must prove their identity, which may not be instantaneous. Similar to PayM, recipients have to be registered to Pingit, which means senders must know if the recipient is registered. Lastly, it is a stand-alone app, which means that the customer must toggle between apps. By offering their solutions within the app, NatWest and Clydesdale Bank ensure the customers can quickly complete a payment after checking their balance.
According to recent research by Adaptive Labs, 52% of customers want to be able to add a new payee within the app. The fact that Lloyds Banking Group customers could do this contributed to its high ranking in industry reports. By introducing a feature which allows customers to make simple payments, and limiting the risk by capping the amount at £250, NatWest and Clydesdale Bank may be starting a welcome change in the way UK consumers can make payments.
For the latest digital banking innovations from UK and overseas banks, subscribe to our regular Dashboards. For more information, please contact us today.