If you have a bank account, you probably have an IBAN - an International Bank Account Number. It is a well-structured text string which unambiguously identifies your account.
A typical UK IBAN looks like
GB33BUKB20201555555555 - with it, you can send money to that account from any bank in the world. OK, some banks make international transfers complicated or expensive, but it generally works!
Wouldn't it be great if I could write a URl like
https://iban.pay/GB33BUKB20201555555555/€50 or similar. Then, when you click it, you *waves hands* can send me a specific amount of money.
PayPal already does something like this. https://paypal.me/edent/gbp10 lets you send me a tenner.
A couple of UK "Challenger Banks" have done this for several years. Monzo.me and Starling's Settle Up both offer this feature. Of course, if you're not with either of those two banks, it's a bit complicated to go from their link, to your bank, to make the payment.
So why is there no industry standardisation around this? Surely the basic steps are simple:
- Your bank's phone app associates with
- It grabs the payment info from the URl.
- An API call to get the payee's name / other details.
- You authorise the payment.
And, if you don't have an app, the
iban.pay website asks who you bank with, and then send you to your bank's website to make the payment.
Obviously, that's the happy path - and the reality is going to be a lot more complex. But after half-a-dozen years of banking apps getting popular, why hasn't this happened yet?
Banks are like mobile phone operators: they'd rather nobody has anything good than they and their competitors share something good. This is the same concept as paying by mobile, and exactly the same thing prevents it: utter refusal to cooperate or be open. https://t.co/C683J4Tbwm
— Stuart Langridge (@sil) February 26, 2021
Yup! I worked in the mobile network space long enough to know that large companies are terrified of collaboration. Sometimes it is a well justified fear of being branded a cartel, but it mostly seems to be because they think they can be the only winner.
There are concerns around fraud. In the UK. Authorised Push Payment scams are endemic. Can you trust that the sender of the payment request is really the nice person who did your guttering?
Some banks also run credit cards - and they'd rather collect the fees from those.
But surely there is profit in this for banks? There's money to be made in currency conversion. For small businesses, getting money in the bank means paying less in credit card processing fees - and fewer cashflow issues. Once a customer has shared their IBAN link, they may be less likely to churn.
This (probably) isn't something that a startup can tackle. This requires big, old, slow-moving, mega-corporations to co-operate. So it is unlikely to ever happen.