Starling Bank Augments Payments With Bacs Payment Schemes Limited

March 1, 2018         By: Steven Anderson

We’ve heard about Starling Bank’s operations before as one of the big new challenger banks in the UK, a mobile-only operation that’s offering some interesting new twists in the banking market. We saw it take on unresolved loyalty points before, and now, it’s stepping up its payments game as well thanks to a new connection with Bacs Payment Schemes Limited, which it sent word our way about just recently.

The new connection to Bacs brings with it access to two major programs: Direct Debit and Bacs Direct Credit. While these are mainly geared toward commercial customers at last report, it’s still going to go a good way toward augmenting the capabilities of a mobile-only challenger bank.

Now, Bacs represents a major part of the region’s payment processing, having processed fully 6.35 billion transactions last year alone, with its high-water mark being 111.7 million transactions in one day. Interestingly, Bacs isn’t a newcomer to the field; word from its CEO Michael Chambers notes that it’s in the midst of its 50th anniversary year, offering support for bill payment, salary payments, pension payments and more.

Meanwhile, Starling Bank’s chief operating officer Julian Sawyer noted “Our integration with Bacs is the latest installment in the expansion of Starling’s Payment Services. After joining SEPA in 2017 and announcing the rollout of our Merchant Acquiring services last week, Starling’s customers – both business and personal – will benefit from access to a rich financial ecosystem, now including one of the UK’s largest payment systems.”

The new features make Starling more useful to the current user base and opens up the possibility to bring in fresh users. Hard to beat that, really; it’s also the kind of thing that’s going to be necessary if Starling hopes to have any kind of chance of surviving in the open market. It’s already operating at a serious disadvantage; we’ve just seen that a hefty slug of customers prefers to open an account in person, and a mobile-only bank can’t do that.

To get around customer trepidation, therefore, Starling will have to offer so many features that the value proposition is undeniable. Adding features for the commercial market may be one way to get there, but that’s not going to completely do the job.