Payments
Bristol Pay will deliver a low cost, purpose-driven payment system
Bristol Pay will deliver a low cost, purpose-driven payment system for both point of sale and online transactions. It will be ‘closed loop’, meaning that all users will have an account on the platform. This keeps the cost of making payments between accounts low, as no third parties (like VISA or Mastercard) are involved. By operating at scale, we can even raise funds for local projects across the city.
The Missing £60 Million
Paying at the till with your card or phone involves more than just your bank and who you’re paying. Your money goes on a bit of a journey - there can be three or four other parties involved. The bank on the receiving end, your card issuer, the card scheme itself (for example Visa or Mastercard) and a Payment Service Provider can all be involved in your trip to the shops. All of them charge a fee, which is generally paid by the business.
There are also plenty of places in this journey where your money (and details) can be exposed to security risks - the more parties involved, the less secure a payment is.
A payment platform can avoid these extra fees and risks by ‘closing the loop’. If both the customer and business are members of the same platform, they can transfer the money directly between them - much like PayPal.
Roughly £60 million a year is lost from Bristol in transaction fees to third parties - this money goes into the bank accounts of companies far away from our city. If Bristol Pay can capture just a fraction of this, even with a reduced fee rate, we can repurpose the money to fund projects within our city. This will create a closed loop where payment charges levied in Bristol stay in Bristol - whether spent at businesses big or small.
