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Starling Bank’s latest partnership is a “completely different vertical for us”, says Gareth Towler the bank’s marketplace product analyst.
The challenger bank recently added PayPal’s iZettle to its Business Marketplace as part of its new strategy for deeper integrations.
“From a marketplace perspective, we’re trying to cover the whole ecosystem of needs. With this particular integration, there is more information being shared between the top third parties involved. It’s a lot deeper, which we’ve found to be more effective, so it can generate as much value as possible,” says Towler.
iZettle is the first card payments provider to join the bank’s Business Marketplace, which offers accounting and project management services. Starling has a 4.4 percent share of the UK SME banking market, according to the bank.
“An integration with somebody that provides a way for merchants to take card payments was something that had been requested quite a lot. At the time I looked, around 5,000 people of our Starling business customers already used iZettle,” says Towler.
“If our business customers are using a third party like iZettle, then we’re going to accommodate the fact that they use that third party rather than being able to build something ourselves necessarily.”
Digital payments increased over lockdown as a safer and affordable way to purchase goods and services. Starling found customers’ online spending grew from 50 percent to 90 percent in the first lockdown and has remained at 65 percent since.
The shift towards more independent businesses accepting digital payments pushed the need for a deep integration like this, says Towler.
The in-app integration allows SMEs to access detailed information about sales, fees, and taxes in one place. The information about transactions and VAT fees is added automatically to the app. Customers who are signed up to the Business Toolkit have access to additional accounting features.
“One of the things we try to do with these integrations is provide a high-level summary of the customer’s account that they hold with that third party and show it within the marketplace. Business customers are able to see a really high-level summary of iZettle including a brief summary of the previous week of transactions alongside all of their other plugged in and connected providers,” says Towler.
Starling is one of the first UK banks to offer sole traders and business customers such an in-depth integration within its banking app. Smartphone penetration in the UK has risen to 86.5 percent with more businesses and sole traders looking for convenient ways to manage their accounts online using their mobile.
John Mitchell, CEO of Episode Six, said the partnership will create opportunities for other financial institutions to follow.
“Companies need to adapt and provide new technology to better reach and serve customer bases, whether consumers or businesses.
“This will serve as a road map for collaboration between mobile point-of-sale providers and other financial institutions, where FIs use mobile POS to expand their acquiring networks. With loans, it gives financial institutions the ability to extend their reach of their offering.”
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