How HMRC made history by Choosing Open Banking
In March 2021, for the first time ever, a government integrated Open Banking into their payment processes. HMRC in the UK now gives people the option to ‘pay by bank account’, placing them at the forefront of innovation in payments.
Behind this new payment option is Ecospend, who won the HMRC open banking contract after a rigorous procurement process. Ecospend’s next-generation Pay by Bank technology allows instant account-to-account payments, making it easier and simpler for UK citizens to make payments. With our proprietary technology, HMRC is now able to bring Open Banking to online payments across 13 tax regimes, including self assessment, PAYE, corporation tax, capital gains tax and stamp duty land tax.
So why now? Open Banking has opened up a world of possibilities for the payments landscape. By using verified information, Open Banking enables instant payments directly from the bank account to HMRC with much less risk of error or fraud. No input of sensitive data (such as card details or unique tax reference number) is required when making a payment. All data is pre-populated and authenticated via biometric ID, providing a seamless and user-friendly payment journey that improves conversion rates.
As well as being faster and safer, Open Banking also cuts costs significantly. Card payments are typically expensive, charging between 2% and 4% for every transaction. Open Banking’s direct account-to-account payments bypass these fees, offering the market a much more cost effective solution.
Together, Ecospend and HMRC are bringing taxes up-to-date with best digital practice. Open Banking is future-proofing the government system so that citizens can engage with HMRC in a way that suits their needs, setting an unprecedented example to public bodies and private sectors across the globe.
Open banking payments: government case study
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£1 billion in UK tax paid through open banking
HM Revenue & Customs (HMRC) has reached a significant open banking milestone as the UK government integrates fintech solutions into its own operations.
HMRC extends open banking to payroll payments
The UK’s tax department has gone live with a further step in embedding open banking into its operations
HMRC extends open banking payments to nine further tax regimes
HMRC’s open banking rollout is being undertaken in partnership with fintech company Ecospend, which is providing the payments software to HMRC. The London-based firm was successful in an HMRC tender for open banking revealed by Global Government Fintech more than one year ago.
Paying your tax bill will soon be easier
Paying your tax bill just got a whole lot easier. The 11 million people who fill out self-assessment forms online will no longer have to find credit card details, passwords or unique tax references when paying the taxman.
£2.4 billion processed!
Ecospend was chosen last year to build HM Revenue and Customs next-gen payments infrastructure and its other clients include utility and e-commerce platforms.
One small website button, one giant leap for payments to government?
The new Ecospend-powered service uses validated and pre-populated payment details, enabling payments directly from a payer’s bank account. This automation should increase speed, reduce human error (for example, if someone were to mistype their tax reference number), and also has the potential to reduce fraud.
HMRC awards Open Banking contract to Ecospend
The UK tax authority has handed a £3 million Open Banking contract to fintech startup Ecospend, with the aim of making it easy for taxpayers to submit payments direct from their bank accounts, rather than through debit or credit card.
Let’s boost open banking to stay ahead of the curve
The UK is one of the very few truly global financial centres, with exceptional talent, deep pools of capital, the English language, and a trusted legal system with well-regarded financial regulators too.