Scotland-based Tesco Bank has announced that it’s the first financial institution (FI) in the United Kingdom to introduce technology that allows its 2.6 million credit card customers to more easily manage and pay their balances.
The bank’s “Pay by Bank” platform will be enabled by Mastercard’s Open Banking Connect service, which allows mobile and online credit card customers to make safe and instant electronic payments from their accounts.
The Pay by Bank method allows customers to see their account balance before deciding how much of their credit card balance to pay, and also allows them to see instant updates to their bank balance, Tesco said.
“Tesco Bank’s purpose is to help … shoppers manage their money a little better every day,” said Sigga Sigurdardottir, Tesco’s chief customer officer, in a statement. “We expect this functionality to be widespread in the market in the coming years. This is a great example of the strength that our partnership with Mastercard brings to our credit card offering.”
Testing and rollout of the new service began last month. All app and online credit card customers can expect to have access to the new payment option in the coming weeks, Tesco said.
Founded in 1997, Tesco said it has more than five million customers. Its 4,000 employees serve customers in Edinburgh, Glasgow and Newcastle.
Last week, Mastercard announced its virtual testing platform for central bank digital currencies (CBDCs). The testing tool comes as the global economy embraces digital payments and central banks investigate how to support innovation and maintain financial stability as they issue the currency.
A recent survey revealed that 80 percent of central banks are engaged in some form of CBDCs, while 40 percent have moved from the research stage to experimenting with concept and design, according to the Bank for International Settlements (BIS).
The testing platform allows banks to simulate the issuance, distribution and exchange of CBDCs between financial service providers and consumers.
“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem,” said Mastercard Executive Vice President Raj Dhamodharan in a statement. “This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies.”