The UK’s HM Revenue and Customs (HMRC) has awarded a £3m contract to Ecospend, a fintech developing open finance ecosystems, to build a payments infrastructure.
The future payments infrastructure for HMRC is expected to streamline, automate, reduce fraud and improve ease of use for all taxpayers in the UK.
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Presently, HRMC follows bank transfer system, which is not integrated with its online services. So, taxpayers have to open their own banking software and manually set up a bank transfer payment.
Through the new contract, Ecospend will now provide its account-to-account payment software to allow HMRC to process payments through the use of open banking/PSD2.
Payments can directly be sent from the taxpayer’s bank account, using validated HMRC details and can also address the issues arising from incorrect references. It means that the new system can reduce the potential of fraud, as money is transferred without the need to share card or bank details. Other advantages include cost savings, increased speed and less human errors, noted the fintech.
Open Banking Implementation Entity (OBIE), Ecosystem Engagement head Simon Lyons said: “Today marks a big step forward for adoption as it will help bring the benefits of open banking to the entire UK population. In this instance, the use of open banking technology will revolutionise the often time-consuming manual process of filling in tax returns and will dramatically streamline the processes through automation.
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By GlobalData“It is also just another example of the potential of open banking to provide a tangible benefit to consumers. This effort will also serve to deliver on ministers’ policy intentions to increase the overall capability of and competition in the UK’s banking and payment systems.”
Ecospend founder and CEO Metin Erkman said: “Since founding Ecospend, we have spent the last three-years focused on building our underlying technology and API in-house. Because of this, we’re now able to provide the best solutions, such as our account-to-account payment system for HMRC.
“But, this is just the first step, we understand if we’re really looking to deliver on the promise of open banking, innovation needs to happen at an ecosystem level and that’s what we’re here to do.”
Ecospend was founded in 2017 and has a 50-member team. The startup has been operating in stealth mode until last year.
