Citibank has become the first bank to use the UK’s new Open Banking regime to enable its business clients to receive small payments directly from their UK customers’ bank accounts. Open Banking rules require European banks to give third parties access to their customer data, if the account holders agree. A user will now be able to access a range of services through a single banking app, including from rival companies. Most of the banks to sign up to the new rules have been smaller fintech groups. Citi, however, is the first bank to enroll as a ‘Payment Initiation Service Provider’, allowing it to directly transfer cash from customer accounts without the need for credit or debit cards. Citi believes the direct client to business payment system will be cheaper than current alternatives like PayPal and cards and will prove popular with its clients.
