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Talking tax – in conversation with Ecospend

Ecospend is a financial data and payments platform which won the tender to supply HMRC – one of the biggest open banking initiatives ever launched – in March 2021.

With the January 2022 self-assessment tax deadline just gone, David Beardmore, OBIE’s Ecosystem Director, caught up with James Hickman, Ecospend’s Chief Commercial Officer, to ask how tax season was going. We summarise the conversation below and you can watch the complete video here.

David Beardmore (DB): We’ve just passed the end of January, the deadline for self-assessments, and obviously it’s the busiest time of the year for paying tax bills. So I was keen to hear how things have progressed since we were chatting back in November at Open Banking Expo. How’s it been?

James Hickman (JH): January 2022 was our first real test, because this was the first self-assessment peak.

Both our systems and our technology delivered well, so hats off to our tech guys. I think we’ve now passed around £4 billion in payments. We also had one day in which we delivered over £200 million in payments.

We have introduced nearly one million first-time users to open banking in the past couple of months too.  

Executing a ‘pay by bank account’ process successfully, and this is successful, not just for us, but the whole ecosystem, because ultimately they are transactions that have migrated away from cards and have been executed by customers, using an open banking Application Programming Interface (API).

DB: Those numbers are staggering. It’s a real credit to the team at HMRC for being adventurous and taking it to this level.

But there’s some other real benefits to HMRC too. HMRC sees open banking as really useful in terms of how it receives payments from individuals and small businesses.

JH: Absolutely, you’re leveraging the fact that 80% of our population now have a smartphone and a banking app on their smartphone.

You’re effectively removing the need for a piece of plastic with a 16-digit card number and initiating a single API calling another single API, so it’s a very quick, aggregated journey.

This is not only quicker, and more secure – it removes the risk of chargeback fraud. This might be less interesting for the government, but it certainly saves on fees.

The other thing, of course, which is relevant to HMRC, is around reconciliation.

I know HMRC has issues with suspense accounts and payments coming through which are not easy to allocate because the reference or Unique Taxpayer Reference (UTR) numbers aren’t input correctly. With an open banking journey there’s little room for error. There’s no manual entry required.

James Hickman, Chief Commercial Officer, Ecospend

And it’s fair to say that we have seen 100% reconciliation, in that all the payments we’ve helped to initiate have ended up in the right account. So it’s easy to imagine the benefits of that alone in terms of efficiency and cost savings around not having to repatriate money that then can’t be released to the public purse.

It’s also about giving customers more choice, giving them an option where they don’t have to share card details.

DB: One thing I wanted to pick up was the decoupled journey. Can you explain what that is and how you see it being used for paying tax bills?

JH: Absolutely. One of the things we realised, is that, obviously, an open banking payment journey works far better when initiated through a smartphone because you’re typically using your biometric ID.

That said, people like to complete their tax returns on a computer, not on a phone and so again, hats off to HMRC. They just use the ‘decoupled journey’.

This allows the customer to start or complete their tax return on their desktop, start the payment journey on their desktop, scan a QR code on the desktop then complete the payment journey, via their smartphone using their biometric ID.

It’s the perfect bridge between a desktop experience and a mobile-centric payment journey.

DB:  I want to finish with something that many of us saw in the press when a prominent banker suggested that open banking hasn’t been a success. I’m guessing that you might have a different view.

JH: I think the numbers talk for themselves on this. It’s worth reminding ourselves that this is a very nascent technology.

Things always take many years before they reach that level of ubiquity.

As a recap, we’ve been in the market now for just over a year, our first project was to launch our program with HMRC. We’ve also got a number of private sector clients, large blue-chip organisations using our services, as I know many of our great competitors have as well, but for Ecospend it’s numbers. To recap – over £44 billion has been transacted.

A couple of million new people – both businesses and consumers – were introduced to this solution over the last 12 months.

These are records that keep tumbling, and I’m sure the growth will only increase. If I was a challenger bank, I would be more than happy with those figures less than 12 months from launch.

And it’s worth pointing out that we launched our HMRC program in the middle of a pandemic – we did the whole thing on Microsoft teams.

So we have also been operating in challenging conditions, so I would probably say to that prominent banker look at the numbers and let’s keep pushing it. This is just the start. We are still only scratching the surface.

And one final point to note is that the UK is significantly ahead of the rest of the world with this technology – a global leader – and it’s important that we try to maintain that position!


If you would like to share your organisation’s experience of open banking, please email us at marketing@openbanking.org.uk

If you would like to talk to one of our team about how open banking could help your business, please email us at enquiries@openbanking.org.uk.