Barclays invests in fintechs to transform its mobile app
Barclays is partnering with digital rewards companies as part of its focus on investing in fintech and developing new business models. Its recent investment in Bink, a U.K.-based loyalty platform provider, marks the fourth company in this field that Barclays has partnered with.
Barclays’ investments in loyalty technologies such as Bink are part of its efforts to enhance its mobile banking app. Its other loyalty partners are U.K.-based Flux and Krowd and U.S.-based Kard. In February 2019, Bink closed a £10 million funding round led by Barclays, which took a minority stake in the firm.
“Over 6 million Barclays U.K. customers use the Barclays Mobile Banking app,” said Ruchir Rodrigues, Barclays’ head of digital and open banking. “Bink is an example of how innovative technology can solve an everyday problem for Barclays customers who are retail loyalty program members. The Bink platform will help customers avoid missing out on valuable loyalty benefits in all areas of their spending.”
Bink designed its Payment Linked Loyalty platform to be accessible across multiple interfaces, said Mike Jordan, Bink's CEO. Using Bink’s app, consumers can link their payment cards and loyalty programs and automatically earn rewards when they shop.
“At its simplest, the native Bink App acts as a wallet for loyalty programs, storing digital cards with a bar code functionality,” Jordan said. “They can then see their point balances and recent transactions in the Bink App as well as in their mobile banking apps.”
Jordan said the new funding round, led by Barclays, will enable Bink to realize its ambitions for the year ahead.
“We’ve strengthened our leadership team, which means we’re set to grow through 2019,” he said. “One of our aims is to deliver our Payment Linked Loyalty platform to more merchants and more customers across the globe.”
Apart from direct investments, Barclays also works with fintechs through its U.S., U.K. and Israeli Fintech Accelerator programs. These Accelerators provide a 13-week program including mentoring from Barclays executives and opportunities to participants' solutions.
Among the startups selected to participate in Barclays’ 2019 London Fintech Accelerator is Krowd, whose marketplace provides personalized card-linked offers to retailers and card issuers. Krowd’s machine-learning and AI technology enables retailers to increase customer retention and issuers to increase usage.
Since 2017, Barclays has partnered with Flux, a 2017 graduate of the London Accelerator program. Flux leverages open banking to work with U.K. banks and retailers to give their customers real-time paperless receipts, digital loyalty stamps and digital cashback offers.
In July 2018, Flux went live on Barclays Launchpad, where Barclays tests new features to add to its Barclays Mobile Banking app.
The pilot involves Flux sending real-time digital receipts to Barclays Launchpad users when they spend with their debit cards. In addition, Flux is partnering with Barclaycard to issue digital receipts to any customer from participating banks which are enrolled with Flux.
In December 2018, Flux raised $7.5 million in Series A funding from e.ventures and existing investors PROfounders and Anthemis to accelerate expansion of its platform and hire more software developers.
Flux is currently live with two U.K. challenger banks, Starling Bank and Monzo, offering itemised receipts and loyalty points in their mobile apps. Retailers where Flux users can download digital receipts and rewards include KFC, Costa Coffee and Itsu.
“In the U.K., Barclays’ loyalty platform investments and partnerships are the first steps by a bank to work with fintechs to create a wallet that can do more than just payments,” said Ron van Wezel, senior analyst at Aite Group. “Competing U.K. propositions to Bink and Flux do exist, such as Yoyo Wallet and Zapper. In the U.K., the mobile wallet sector is still far from the Chinese all-purpose wallets, but there is innovation going on.”
Like Flux, Yoyo Wallet, which raised $30 million from investment fund HardYaka in 2018, integrates with banks’ mobile apps to display receipts and loyalty points to customers.
“Barclays has been one of the more innovative U.K. incumbent banks for quite a while,” said Yoyo CEO Michael Rolph. “It has a good track record in innovation, for example with its Pingit mobile payment service. Barclays keeps trying out new technologies, and has invested in fintech more than any of its U.K. rivals.”
Another graduate of Barclays’ Accelerator program is U.S.-based credit card loyalty offers program Kard. Its app provides credit cardholders with real-time information at the point of sale on cash-back, miles and points offers and rewards from participating retailers and credit card issuers.
Kard’s business model involves splitting sales referral revenue it receives from participating retailers with its credit card issuer partners. “We have around 1,000 online retailers signed up and 10,000 participating in-store locations around the U.S.,” said Ben Mackinnon, Kard’s CEO.
“What makes Kard’s offering potentially compelling is the fact that consumers participate in multiple rewards programs,” said Bill McCracken, president of U.S.-based Phoenix Synergistics. “Our data indicates that 89 percent of U.S. households participate in a loyalty/rewards program. Seventy nine percent participate in a financial industry rewards program and 78 percent participate in a loyalty/frequent shopper program. Consumers face challenges in knowing which rewards program to use for any specific transaction.”