Vyne Newsletter February 23
Cupid came and went but February saw a lot more than just awkward first dates and flipping pancakes. This month we’re taking a deep dive into the ‘digital pound’ announcement from the Bank of England and UK Treasury, what consumers will come to know as Pay with bank and the new payment method shaking up the automotive industry.
February highlights:
?? The UK Digital Pound explained
??Is the Open Banking payments market heading toward a consumer naming convention?
?? The new payment method shaking up the automotive industry?
?? Open Banking reaches 7 million active consumers?
???The digital pound explained
On February 6th, the UK Treasury and the Bank of England announced plans for a ‘digital pound’, expected to hit the market later this decade. The Government could still choose to veto the plan but momentum is building. But what does this all mean???
The digital pound is a form of Central Bank Digital Currency (CBDC). An alternative to cash and accessed through digital wallets provided by other companies. It would equate to the same monetary value as cash.??
?? For consumers this means….?Digital pounds would be used to make payments in person or online. It would be transferable with cash and bank deposits however, no interest would be made on digital pounds.?
?? For merchants this means…?In theory, there could be huge cost savings as these digital currencies bypass high-cost intermediaries.?
?Here's what Vyne Co-Founder and CEO, Karl MacGregor has to say:
?“The benefits the Bank of England expects to see from a digital pound could be achieved by improving existing infrastructure. We already have digital transactions today through services such as Apple Pay, virtual cards and, increasingly, open banking-powered payments.
?"A digital pound could help consumers and businesses by speeding up reflection times, and removing some cost and risk from the model. But the core issues of speed, trust and convenience won’t disappear simply because the payment has moved from one ledger to another. It simply won’t work for particular use cases and for the stakeholders that rely on BACS, faster payments and a wealth of international systems.
?"Issues such as payment and online fraud can only be solved through improved identity and trust solutions, which again already exist. The question that needs to be answered is — do we really need a new set of rails or should we improve and build on the current rails?”
??Is the Open Banking payments market heading toward a consumer naming convention?
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Have you noticed the terms Pay with bank, Pay by bank or Instant Bank Transfer more often?
The Open Banking payments ecosystem is heading towards a standardisation of the term used to describe the method to consumers. Having a single consistent term will help consumers understand what to expect from the payment in the same way they understand what it means by Card or Buy Now Pay Later. But why not just ‘Open Banking’?
Consumers don’t know what ‘Open Banking’ is. It’s a jargon term and doesn’t align with an action or goal. Here’s why Vyne use Pay with bank:
1?? It clearly and simply explains the method of payment.
2?? It differentiates from other payment methods at checkout such as card, BNPL and eWallets.
3?? By referencing ‘bank’ it adds familiarity and builds trust.
???Vyne snippets
?? At Vyne we pride ourselves on the experience we deliver to our merchants.?Customer success is a huge part of this.?Read our recent spotlight to learn more.?
?? We hopped over to our friend and partner BR-DGE to kick-off their ‘meet the partner’ blog series,?check it out to learn more about our partnership.
?? Get those party poppers out,?last week it was announced that Open Banking hit 7 million active consumers.?[Source:?Open Banking]
???The new payment method shaking up the automotive industry
To stay ahead of the competition automotive companies need to find ways to take their business up a gear (bad pun), to streamline their operations and boost bottom lines. AM Online this week published an article on the new payment method doing just that. Find out more about the use cases Open Banking powered payments are enabling, including: