HMRC has awarded its £3 million Open Banking contract to Ecospend, a FinTech which will support the tax authority with automating parts of its payments process and improving ease of use for UK taxpayers.

Announcing the contract, which was awarded after a competitive tender process, Ecospend said their Open Banking technology would help HMRC’s bank transfer journey integrate with its online services, whilst reducing costs for HMRC itself.

At present taxpayers need to open their own banking software and manually set up a bank transfer payment, creating the risk of manual mistakes including incorrect references for payments.

Ecospend will now provide its account-to-account payment software to allow HMRC to process payments through the use of Open Banking/PSD2 data sharing infrastructure.

The technology will enable payments to be sent directly from a payer’s bank account, using validated HMRC details, meaning increased speed and less human error.

Ecospend said the system also has the potential to reduce fraud, as money is transferred without the need to share card or bank details.

Commenting on the move, Simon Lyons, head of ecosystem engagement at the Open Banking Implementation Entity (OBIE) said, “Today marks a big step forward for adoption as it will help bring the benefits of Open Banking to the entire UK population.

“In this instance, the use of Open Banking technology will revolutionise the often time-consuming manual process of filling in tax returns and will dramatically streamline the processes through automation.”

He added: “This effort will also serve to deliver on ministers’ policy intentions to increase the
overall capability of and competition in the UK’s banking and payment systems.”

Ecospend was founded in late-2017 to take leverage the potential of PSD2 and Open Banking data sharing. Its proprietary technology has been designed with the Open Finance ecosystem as its ultimate objective.

The 50-person company has been operating in stealth mode until late last year when it pitched for the HMRC tender.

Metin Erkman, founder and CEO of Ecospend added: “Since founding Ecospend, we have spent the last three-years focused on building our underlying technology and API in-house.

“Because of this, we’re now able to provide the best solutions, such as our account-to-account payment system for HMRC. But, this is just the first step, we understand if we’re really looking to deliver on the promise of Open Banking, innovation needs to happen at an ecosystem level and that’s what we’re here to do.”

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