Home Open Banking & Finance UK’s NS&I follows HMRC’s lead in embracing open banking tech

UK’s NS&I follows HMRC’s lead in embracing open banking tech

NS&I: the state-owned savings bank provides Premium Bonds (which offer monthly prizes) | Credit: NS&I

NS&I (National Savings & Investments), a UK state-owned savings bank, has followed HM Revenue & Customs (HMRC)’s lead in engaging a fintech company to enable the use of open banking technology to enable people to make payments.

NS&I – which is a non-ministerial department – said this week that people will be able to select a ‘Pay by bank account’ option when making online payments to NS&I.

‘NS&I’s online customers wishing to top up their Premium Bonds and other easy-access savings accounts will shortly start noticing a new payment method, “Pay by bank account”, appearing in their payment options,’ NS&I states in its announcement.

The ‘Pay by bank account’ button is possible thanks to open banking – a fintech term that refers to the use of open application programming interfaces (APIs).

NS&I is using the same fintech company – Ecospend, whose acquisition by Sweden-headquartered Trustly completed in January – that HMRC has been using for the past couple of years for the same purpose. HMRC also refers to its open banking payment option as ‘Pay by bank account’.


‘Automatically fills in details’

“I am pleased that NS&I is able to offer our customers the benefits of the latest banking technology to top up their easy-access savings accounts,” said Dax Harkins, who became NS&I chief executive in April, in the announcement. “Customers with most UK major banks and building societies will soon find that they can smoothly make transfers into their NS&I variable savings accounts as we start to roll out ‘Pay by bank account’ over the coming weeks.”

NS&I acknowledges HMRC’s status as a pioneer (within government) in embedding open banking technology. ‘Customers may already be familiar with the “Pay by bank account” technology, for example when making a self-assessment payment with HMRC, paying a credit-card bill or making an online charity donation,’ it states in its announcement.

“‘Pay by bank account’ enables customers, who use online banking or a banking app, to easily and simply transfer funds by connecting directly to their bank – beginning and ending within NS&I’s secure website. The great advantage is the system automatically fills in the customer’s NS&I account details to ensure their money reaches their account seamlessly,’ NS&I explains.

The experience from the user perspective seems identical to that via the HMRC website. ‘Customers will soon start seeing “Pay by bank account” as a new option for making additional deposits when they log into their online account,’ NS&I states. ‘Customers will be securely transferred to Ecospend, where they select the bank they wish to make their payment from, before being securely transferred to their chosen bank to approve the payment.’

Banks have different upper limits on how much money can be sent via open banking. Limits are typically between £10,000 (about $12,500) and £50,000 (about $62,600).


HMRC’s two-year (plus) open banking journey

HMRC created global government fintech history on 24 March 2021 when it introduced its ‘Pay by bank account’ option (button) for people making online self-assessment tax returns  – believed to be the first time any government in the world had embedded open banking within its own operations.

Payment of three further tax types via open banking – PAYE (Pay-As-You-Earn) payments (tax paid direct from workers’ salaries), corporation tax and value-added tax (VAT) – was made possible shortly afterwards. The number of tax types payable to HMRC by open banking reached 43 last year.

Global Government Fintech reported earlier this year that HMRC had completed its rollout of open banking across all tax payment types capable of supporting it. The department’s head of payments, Nick Down, spoke at the time of ‘increasing interest’ across UK government in using open banking.

NS&I is best known to the public through its issuance of Premium Bonds and other savings products. But it also runs NS&I Government Payment Services (NS&I GPS). Formed 13 years ago, NS&I GPS provides banking and payment services for other government departments, including working with HMRC on ‘Help to Save’, ‘Tax-Free Childcare’ and ’30 hours free childcare’.


Global Government Fintech’s ‘Open Banking & Open Finance’ topic section


UK government adopts open banking for tax payments Global Government Fintech explores HMRC’s pioneering use of open banking