Frictionless Finance Report - Wednesday 17th February

This month we examine the impact Open Banking is having on payments, the launch of Open Banking in Brazil and the never-ending rise in the price of Bitcoin.
Published on
February 17, 2021
Finance & Fintech

Welcome to the Frictionless Finance Report, our monthly look at everything new in the world of Open Banking, FinTech, and consumer experience. If you’d like to receive this in your inbox, fill in the form at the bottom of the page. This month we examine the impact Open Banking is having on payments, the launch of Open Banking in Brazil and the never-ending rise in the price of Bitcoin.

Open Banking 

The world of payments is one that we have covered many times on these pages and in our blog (examples include this and this). 

As this world continues to evolve and adapt, we find that what was recently the norm has now changed for something altogether. 

And here Open Banking will play its part. By no means the norm or the standard bearer at this point, as tendencies, technologies and trends are established and others broken, the real winners will emerge. 

In our research of the top trending news in the world of Open Banking over the last four weeks, discussion on payments was prevalent.  One major reason for this was fallout that Mastercard are set to begin charging additional fees to UK customers importing from Europe. 

Although widespread annoyance at Mastercard’s decisioning was evident, it has promoted over the last three weeks, a closer examination of the card and payment sector to, with many looking to understand if there are less expensive methods for making payments.  

Lars Trunin, Head of UK Product at TransferWise, speaking to AltFi, said: 

To consider increasing the cost of card payments fivefold is genuinely staggering, and cannot be seen to be anything other than unprincipled. But this move, while disappointing, could accelerate the uses and demands of Open Banking. 

He rightly interprets some of the key advantages of using Open Banking in payment that avoid card charges. As well as being faster and equally secure as cards, Open Banking is also considerably cheaper. 

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In the same publication, Hiroki Takeuchi of Gocardless states his reasons for why the end is nigh for cards. As well as picking up on the increased fees being charged by card issuers, he reflects that it is likely that these will be passed on to consumers. Takeuchi also notes that businesses are also taking this point of enforced closure to reassess their business models, including payment options, and there is now better and cheaper alternatives available.  

On Open Banking, he writes: 

We believe that these numbers will continue to rise throughout this year and beyond, providing merchants and customers with a quick, secure and easy way to pay - all at a much lower cost.

The likelihood of consumers embracing Open Banking payments has been picked up by American Express, who in new research, suggest that they will indeed decide that it is more economical and efficient than current options.  American Express state that 33% of consumers would now be confident to try Open Banking payment mechanisms to make online purchases. While this figure is on an upward trajectory, they are also at pains to point out that 51% would be more hesitant, and therefore conclude that trusted brands or companies take the lead in introducing payments made through Open Banking.    

For his part, Tony Thompson, writing in Finextra, writes that there has been significant development in payments which have come about as a direct result of the pandemic. He also notes that this is a critical time for financial institutions and their use and development of APIs. Within the payments realm specifically, 2021 may be the time that biometrics, voice and face ID begin to take off to augment security.


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From our own work in the mortgage sector, we are acutely aware of the impact that Open Banking can have on the sector. For the first time, Trussle, writing in Mortgage Solutions outline some of the benefits that consumers will enjoy once implemented. 

Consumers will be able to receive lending decisions faster and with ease compared to today’s services. This will have particular benefits for certain sectors of society such as the self-employed who may currently find it more challenging to be accepted for a mortgage. With Open Banking, there is less back and forth between lender and broker resulting in faster decisions. 

Best of the rest in Open Banking: 

  • There have been a number of good overview pieces on Open Banking published in the last month. If you are new to Open Banking, or would like to learn more, these pieces in Fintech MagazineUK Tech News and Techstory will stand you well.   
  • Bobsguide posits that the issue with Open Banking, is in fact, the poor quality APIs that are being developed by some banks.  

Open Banking Abroad 

After a slow start to the year, we are pleased to see news reach us from foreign climes as Open Banking continues its global surge. 


On February 1st, the first stage of Brazil’s Open Banking regimen was made live. In phase 1, there will be no sharing of consumer transactional data, but participating companies must be able to illustrate the channels they will use, and their API development.  

Isaac Sidney, president of Brazilian Banking Federation (FEBRABAN), said:   

Open Banking will encourage innovation and tends to boost value to customers with new products and services, accelerating the digital transformation of the financial market. The expectation of the banking sector with its arrival is very positive.

News via zdnet and bnamericas  

United States 

We have covered developments in the world’s biggest economy closely, and with a series of feature articles being promoted in Forbes, it is clear that progress there is beginning to make waves. 

In their two articles, Forbes cover why now is the time for Open Banking to be introduced in the US, and what the potential impact will be. They examine the pressures being faced by banks, and the need to evolve in order to meet consumer expectation – particularly younger generations.  

Forbes, part 1, and Forbes part 2



The impact of digital banks in the UK has indeed been pronounced since they began to burst onto the scene a decade ago. They have continually chipped away at the user-base of the big four legacy banks and have driven innovation that has been routinely copied by their older counterparts.

And yet questions remain unanswered. While they continue to drive enormous funding rounds based on huge valuations, none have as yet turned a profit. At some point we expect investors will want to see a return on their money – notwithstanding the 2020 fad of companies having an IPO who had never turned a profit. Moreover, while they have loyal customer bases, they have as yet not come close to challenging the numbers that the likes of Lloyds, Halifax, RBS or HSBC can brag about.  

As we cover in our first article, one large problem for them is that legacy banks are now copying their business model and launching their own digital banks. We have already seen a few fall by the wayside – Bo from RBS being one example, but others have been launched and others are in development. Marcus from Goldman Sachs has performed well since launch, and now JP Morgan is looking to follow their example with the launch of their own digital offering.  

While JP Morgan have remained tight lipped to date, they have confirmed that they have 400 employees hired in the UK.  

Revolut has quietly entered the US market and is now preparing for launch according to CNN. The bank already has 15m customers globally, and plans to apply for a banking charter stateside. 

Not to be outdone, arch rival Monzo has come top of a list of banks ranking outstanding customer service. The poll of 1,000 people conducted by IPSOS saw Monzo and First Direct come top of the pile, and Tesco bank languish at the bottom of the pile.  


Could it be that bitcoin will become a regular staple on these pages? While it has a long way to go before it becomes a globally accepted currency, its massive rise in price valuation will see it become far more ubiquitous.  A bitcoin is now valued a little under $50,000, a growth that has been instigated by the news that Tesla and Elon Musk have bought $1.5 billion and plan to accept it for payment of its vehicles. 

Separately, Visa has announced it is preparing to accept Bitcoin across its payment rails in future. 

The news has been well covered by the CNBCForbesBloombergBBCFinextra and CNBC

Best of the rest in Finance: 

  • The scale of credit card fraud and cyber-crime should be designated a national security issue say RUSI. 
  • There is continued chatter about regulation of buy now pay later firms, and covered by the BBC and Finextra
  • Finally, years after their disappearance, might we once again begin to see regional banks in the UK? The FT [paywall] and Banking Exchange have more.  
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In FinTech this month we’ve seen disparate news emerge from different parts of the sector. How the sector is supported through the current pandemic to ensure of its continued success is one theme that was prevalent last month and we have seen more evidence of this emerge.  

In a collaborative paper between FinTech Scotland and FinTech Wales, the paper’s authors call for increased levels of research and innovation to accelerate FinTech development throughout the UK. The full paper can be accessed here.    

Looking at three of our previous themes, bitcoin, payments and the future of digital banks feature heavily in the FinTech Times list of 10 predictions in FinTech for 2021. Other predictions include accelerated digitalisation of banks, the continued growth in Open Banking and a continued increase in the volume of Fintech unicorns. This has been supplemented by a ‘top 5’ prediction list in Entrepreneur. They also espouse the virtues of Open Banking, alongside voice tech and financial literacy. 

Atto News 

Another busy month at the Atto Virtual HQ.  

This month we published a new article ‘Excluded, Distressed & Underbanked: Tier 1’s, It’s Time to Evolve’. The latest piece in our customer vulnerability campaign calls for financial institutions to evolve their thinking around customer vulnerability, just as the FCA have.  

Atto is recruiting! As the team and company grows, we're looking for a range of positions across our Commercial, Development and Customer Success teams. Find out more here. 

In addition to this, our CEO & Founder, James Varga, labelled the UK government kickstart scheme “a great opportunity” for FinTechs around the country. Having recently been accepted to participate in the programme, Atto are set to take on up to 30 job seekers between the age 16 and 24, all of whom are claiming Universal Credit and at risk of long-term unemployment. 

Last month we hosted the webinar ‘Unpacking The FCA's Vulnerability Guidance Consultation’, where the team explored how lenders and financial institutions can better protect vulnerable customers. Watch the full recording here and keep an eye out for the next webinar announcement later this week. 

As ever, do let us know any thoughts or comments. We’re available through our social channels and on email –     

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