Since it was founded in 1997, Tesco Bank has been on a mission to help Tesco shoppers manage their money a little better every day.
In 2020, Tesco Bank teamed up with Mastercard to offer the open banking feature Pay by Bank that allows millions of Tesco credit card customers to pay their bill directly from their bank account.
Thanks to the remarkable results of collaboration, Tesco Bank has now expanded the partnership with Mastercard to offer frictionless open banking top-up payments.
Let’s deep dive into the partnership and explore the results of the collaboration so far.
Open banking front-runners in the UK
Before teaming up with Mastercard Open Banking, Tesco Bank credit card holders had to manually enter their details every month when setting up their bill payments. If they wanted to check account balances before making a payment, it was a separate task that took up more time.
In a fast-moving digital world, this traditional process was more time-consuming than what consumers have come to expect from their financial apps and services. It also left the door open to manual error: One mis-keyed number could cause delays, errors and possibly a late payment.
To address this friction in the customer experience, Tesco Bank became the first UK bank to leverage open banking payments in 2020 by partnering with Mastercard to implement the Pay by Bank feature, enabling customers to pay bills directly from their connected accounts.
Quickly after that, more than 2.5 million Tesco Bank customers were able to start making their monthly payments seamlessly and securely using their preferred bank’s login details.
In that way, customers no longer needed to manually enter account numbers, and the customer could view the balances of any connected account before setting up a payment.
Results that speak for themselves
Thanks to the open banking partnership, Tesco Bank saw a 40 percent volume growth* in the Pay by Bank feature between September 2022 and August 2023, which corresponded to a 20 percent payment share growth* from its initial launch in the last part of 2020 to the middle of 2022.
This shows that consumers are readily adopting open banking solutions at an increasing rate. And that’s why Tesco Bank decided to expand the partnership with Mastercard Open Banking to include seamless top-up payments for the Tesco Bank Clubcard Pay+ & Top-Up Instant Savings account.
Thanks to the easy implementation process, Tesco Bank implemented Mastercard’s top-up payments autonomously in just 6 weeks. Only 3 months after they went live with the new solution, Tesco Bank processed 6000 monthly top-up payments.
Commenting on the partnership, Kelly Devine, Division President for Mastercard UK and Ireland, says:
“Bringing more simple, safe and convenient ways for people to pay is at the very heart of our open banking solutions. With the open banking solution, Tesco Bank customers have greater flexibility to make payments against card balances than ever, aiding budgeting and placing them in full control of their finances.”
As part of the deal, Tesco Bank has planned to integrate Mastercard’s account information services (AIS) to give them the capabilities to offer their credit card customers data solutions to help them manage their money.
Want to learn more about how open banking transforms top-up experiences? Visit our home for top-up payments or see how Saxo Bank built seamless payment experiences with open banking payments.
*Source: Tesco Bank internal customer data, 2023
