In August of this year the Competition and Markets Authority told banks that they had to place a greater emphasis on mobile and digital technologies, Barclays Bank appears to have taken note.
The UK bank has decided to team up with the Commonwealth Bank of Australia in order to allow customers to send instant mobile payments around the world, using only a phone number.
The work together has seen Barclays connect its Pingit m-payments app to CBA’s own version, CommBank, which lets customers transfer funds without needed to enter in banking details.
It’s uncertain whether this is the kind of mobile innovation that the CMA was looking for from UK banks but it could certainly give the two banks a helping hand in the area of international money transfer.
The international money transfer market has become a space of heated competition with the likes of Transferwise and Azimo successfully undercutting banks.
Transferwise has achieved success through a peer-to-peer model which works by making two local transfers instead of one. The benefit of this is that it bypasses the international transfer fees which are applied by banks.
Barclays will be hoping that its Pingit app, which launched in 2012, will help it to gain a bigger slice of the market share. The app is said to have around three million users and it is available to non-Barclays customers.
Users of the app have been able to use it to send money overseas, but the work with the CBA marks the first time it has been possible to make two-way transfers.
Barclays will be hoping that the move will give it access to CBA’s customers, something which should reap rewards for the bank.
There is no transfer fee to use Pingit to send money overseas to over 30 countries, however, the bank’s website says: “For a limited time any international payment made with Pingit is fee-free,” which suggests that customers may well face a fee for international transfer in the future.
By comparison, Transferwise only charges a service fee, for all amounts over £400 being sent to Europe, it charges 0.5%, or a minimum fee of £2. This will surely have to be the benchmark for Barclays if it does decide to start charging a fee for international transfers.