Open Banking is helping underserved communities to level up, by creating a pathway to address poverty tariffs

Discover how obconnect, a leading open banking technology provider, is working with PayPoint to help underserved communities level up.

An obconnect & PayPoint Partnership

The current financial landscape in the UK is tough for many people due to rising energy bills and inflation. This has put a strain on household budgets and the government estimates that 8.8 million households in England could be classed as fuel-poor in 2023.

To address this issue, the government has introduced various support schemes to help with the cost of rising energy prices. Ironically, the poorest in society have encountered challenges in accessing the government support payments they urgently require. 

Why low-income households struggle to access government energy relief payments 

One primary reason for this is the reliance of these individuals on prepaid energy meters and their limited access to traditional banking services. Many low-income families choose to pay their bills in cash and an estimated 1.3 million adults in the UK don’t have a bank account. 

This poses a unique challenge as utility companies often prefer direct debit setups to facilitate the smooth transfer of funds owed to individuals. As a result, those who rely on prepaid meters often find it more difficult to receive the support payments they are entitled to, exacerbating their financial difficulties. This is primarily because energy companies possess bank details for direct debit subscribers but not for users with meters.

As the CEO and Co-founder of obconnect, a leading open banking technology provider, I am proud to share how our partnership with PayPoint is supporting the government’s “Levelling Up” initiative and helping underserved communities access essential financial support.  

How obconnect and PayPoint are helping the poorest in society “level up”

Through our collaboration with PayPoint, we have taken proactive measures to tackle an issue related to the distribution of government energy relief payments to the poorest members of society. 

We have acknowledged that individuals without direct debit setups face significant challenges in accessing essential financial support, despite being the ones who needed it the most. This realisation marks the initial step towards addressing the needs of vulnerable customers through open banking. 

The existence of poverty tariffs and non-direct debit payment schedules allows us to approach our customer base from a fresh perspective, recognising that they have been at a disadvantage for many years. 

This approach has two key components that contribute to levelling up financial support for underserved communities:

1. Open banking enables easy access to government energy relief payments

Open banking is playing a crucial role in expanding payment options and facilitating access to financial support for the poorest in society. Through our collaboration with PayPoint, we have taken significant strides to address this challenge and provide easy payment alternatives.

Working together, obconnect and PayPoint have devised a solution that allows individuals to easily collect their payments in cash from PayPoint stores or receive funds directly into their bank accounts using a QR code. This approach enables utility companies to efficiently distribute money to individuals who pay by prepaid meters and, therefore, lack the privilege of immediate refunds through direct debit setups.

By leveraging open banking technology, we are empowering utility companies to streamline the payment process and ensure that financial support reaches those who need it most. 

2. PayPoint uses obconnect’s technology to check and confirm the identity of payees

Our software’s Confirmation of Payee feature allows PayPoint to swiftly and accurately authenticate individuals opting to receive funds directly into their bank account through the QR Code they receive. This enables PayPoint to validate their bank account details within minutes, ensuring accuracy and efficiency. 

As a result, utility companies can securely transfer payments to the intended recipients, ensuring that the funds reach the correct individuals.

Leveraging open banking technology also eliminates the risks associated with individuals providing incorrect information. This, in turn, significantly reduces delays in payment disbursement and ensures that those who are in need receive the financial support they are entitled to quickly.

Key takeaways

  • obconnect, in collaboration with PayPoint, is addressing the challenge of distributing government energy relief payments to the poorest members of society. 
  • Open banking also expands payment options, enabling individuals to collect cash payments from PayPoint stores or receive funds directly into their bank accounts using a QR code.
  • Our Confirmation of Payee technology allows PayPoint to swiftly and accurately validate customers’ bank account details within minutes.
  • To date, we’ve supported the distribution of over £150 million worth of money via PayPoint and utility companies. 

Final thoughts 

I strongly believe that open banking, combined with a focus on financial inclusion, has the power to revolutionise the financial landscape and empower underserved communities. At obconnect, we are at the forefront of this movement, harnessing the advantages of open banking to bridge the gap and ensure fair access to entitled financial support.

Early adopters of innovative banking technologies, such as our energy clients, are paving the way for advancements within the banking sector. With digital access as the sole barrier, these users will no longer face financial exclusion.

If you are interested in learning more about our open banking products and consultancy services, please don’t hesitate to get in touch.       


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