Everyday Spending and the Open Banking Revolution

A consumer doesn’t need to know a lot about finance to get the most out of their income. For years now, websites and blogs have given people tips and hacks to help them with their daily budgets. With the introduction of open banking, consumers now have the tools to use their money more effectively than ever before. All customers need to do is combine innovative apps with their everyday spending and a whole world is opened up to them. 

There are various apps which reward loyalty in new and clever ways. For example, Airtime Rewards gives customers the option to pay their mobile phone bills using cashback from certain partner shops. This makes bills seem almost inconsequential and definitely affordable. The Tail app helps Monzo and Starling users to send cashback they’ve earned directly to their banking app, meaning they can manage all their money in one place. Flux sends a receipt and reward to Monzo, Starling and Barclays users whenever they shop at partner retailers, making it easy for customers to keep track of their expenses and at the same time enjoy an effortless, digital loyalty scheme. Self-check-out is made easier by MishiPay which enables shoppers to scan barcodes in a physical store and pay instead of queueing. The security tags are disabled automatically when the payment is made, creating a hassle-free, time-saving, shopping experience.  

Sweden-based Goloyal is an app partnered with Tink, which can be downloaded by consumers and linked to their bank. Based on their purchase history in various retail outlets and restaurants, they receive rewards when they buy something. At the same time as benefitting the customer, the retailers and restaurants get valuable details and data regarding spending habits and can make changes to their products and services based on these insights. 

Unexpected purchases can be a big problem for an average household. Fintechs are helping customers get on top of this issue. For example, the Hastee Pay app gives salary advances of up to fifty percent when extended as a benefit by an employer. The fees are much less than if the employee had to resort to other credit issuers due to an emergency. There are also numerous apps that help consumers who’ve got little or no credit history to build a credit rating based on their everyday spending habits. This is often essential for first-time buyers who need a credit rating when taking out a mortgage.

These are just a few of the ways that consumers can passively benefit from open banking powered apps. The PSD2 directive has created a new marketplace driven largely by fintech companies. With time, the driving force will be the customers themselves.

Pay iO’s articles do not constitute financial advice and are for information only.