By CEO Luke Massie
Yesterday, the UK Government issued its 'Future of Payments Review,' reflecting the evolving payments landscape. As a key player in the fintech sector, VibePay is keen to offer some insights and reflections, paying particular attention to two pivotal themes identified by the HMR Treasury: enhancing the account-to-account process for consumers and addressing rising payment costs for merchants.
Enhancing the Consumer-to-Consumer Bank Transfer Experience
The UK Government acknowledges the inefficiencies in consumer-to-consumer bank transfers, an issue not confined to legacy networks and cards but extending to wallet schemes like PayPal. We recognise the need for a seamless, user-friendly experience in peer-to-peer transactions and enhanced consumer protection, comparable with our international counterparts WeChat and Alipay.
At VibePay, we simplify these processes by replacing the traditional entry of account numbers and sort codes with private and secure personal links and QR codes. Users link their existing bank accounts, creating two-way communication channels, fostering a unified space for both transactions and communication.
While the adoption of wallets has been strong, problems still persist, especially around settlement. Both card payments and wallets have delays in the settlement process to the end user, with cards generally taking a 3–5-day period and some wallets not making funds available for up to 21 days. At a time when more people and businesses are surviving payday to payday, having a cash flow process that is instant is more vital than ever.
Addressing the Problem of Increased Fees
Traditional payment methods often burden merchants with significant fees. As an FCA-regulated entity, VibePay is leveraging Open Banking to move money instantly between bank accounts at a fraction of the cost. VibePay absorbs these fees to create value within our network, ensuring a fee-free experience for our users at both ends of a transaction—an industry first. Vibe’s ‘No Fees, No Fuss, Instant Payment’ approach is already resonating with SMEs and businesses across the UK.
The Future Isn't Just Payments, It's Embedded Finance
Payments are a means to an end. We see a future of complete embedded finance, building better relationships with the financial institutions we rely on. When users link their bank account to VibePay, a channel is automatically created, which, while currently one way, has garnered interest from several tier-1 banks in partnering with VibePay, paving the way for conversational, two-way banking. This innovative approach will transform the user experience, aligning with the UK Government’s broader vision outlined in the report.
Creating a Movement
We are leading a shift in the payment market from a per-transactional gatekeeper model to a value-add network that works for everyone. The payments industry is going through its transformation, similar to the telecoms industry just before VOIP. Who remembers paying 20p for a message before the introduction of WhatsApp or iMessage?
Scale and Ambition
With the demand for instant A2A payments on the rise, governments, regulators, banks, and technical service providers are all working on the infrastructure and will lay the foundations to allow VibePay to launch in other territories. In the US, for example, VibePay will have a compelling product differentiation to wallet-based apps such as Venmo, owned by PayPal, and CashApp, owned by Jack Dorsey’s Square, both of which charge users for same-day withdrawals. This journey has just begun, and there's immense value yet to be created.
In summary, we recognise the challenges outlined by the UK Government, and we are looking to address them, driving innovation in the payments space. From streamlining consumer-to-consumer bank transfers to offering a zero-cost alternative for merchants, we remain committed to enhancing the payments experience for both consumers and businesses as we navigate the evolving landscape. The call for a National Payments Vision and Strategy isn't merely a suggestion – it's a blueprint for progress, unlocking the UK's economic potential and positioning VibePay at the forefront of the digital economy.