Fintechs say UK credit cards restrict access to consumers’ own data

Fintechs in the UK have accused credit card issuers including NatWest and Barclays of “costing consumers millions” by not giving full access to their own data.

“Britain’s 14.5mn interest-paying cardholders [are] losing millions, if not billions, of pounds a year, at a time when their finances are already crippled by the cost of living crisis,” said Gavin Shuker, chief executive of credit card management start-up Cardeo, in a letter to City minister Andrew Griffith sent last week.

The letter reflects frustration among some fintechs who argue that if consumers were able to share their full financial data with them, they could better offer money-saving services including personalised spending insights, ways to manage credit card debt and cheaper payment methods.

Under regulations which came into effect in 2018, credit card issuers are required to allow customers to access and share online account data with third parties, but this does not extend to information such as interest rates and loyalty scheme points contained within monthly statements.

“When open banking was envisioned, the original idea was to share everything on the bank statement,” said James Vargas, chief executive of credit scoring fintech DirectID, referring to a framework for allowing customers to access and share financial data with third parties. “Some of the banks do, but some others still don’t even give a PDF copy.”

Use cases for open banking include direct account-to-account payments, potentially a cheaper rival to traditional card networks such as Mastercard and Visa which are under scrutiny over the fees levied on businesses, especially for cross-border transactions.

Campaign group Axe the Card Tax, which includes trade bodies such as the British Retail Consortium, the Federation of Small Businesses and the Retail Charity Association, estimated that in total, scheme fees — which go to the card networks — and processing fees could cost businesses in the UK £1.9bn annually.

“One of the real shames is that at the launch of open banking, it was heralded as creating a golden age of competition, given everyone the ability to offer products to consumers,” said Hamish Blythe, founder of fintech Trilo, “but we’re still limited on the data, which means that open banking payments can’t stand up to the card system.”

Other uses for open banking include new forms of credit scoring, which can offer those with “thin” credit files — including recent immigrants and the financially excluded — access to more equitable lending.

Gary Greenwood, analyst at Shore Capital, said: “These new fintechs are based on being able to access data, in order to improve competition. There is a risk to banks if they don’t comply, they could find themselves exposed [to regulatory action].”

In his letter, Shuker, a former member of parliament, said that NatWest and Barclaycard — which together make up about a quarter of the UK’s credit card market — were among the firms failing to meet data sharing requirements.

NatWest had failed to introduce changes after originally delaying updates to January 2022, said Shuker.

Barclays, the UK’s biggest credit card provider through its Barclaycard brand, was also singled out in the letter, which said it only made limited information available to customers through third party providers such as fintechs.

NatWest said: “We share the required information with our customers when they view their credit card accounts online.”

Barclays said: “We actively participate in the open banking ecosystem, working with all authorised third-party providers and following the regulatory requirements in order to help customers get the most from their finances.”

“We have lots of resources online to help developers build, test and launch new open banking services with Barclays, as well as a dedicated support centre to help resolve any issues as quickly as possible,” they added.