Can anyone reassure me regarding Chip and Plum?

bluehydrangeas

I am currently exploring alternatives for setting up DDs to savings accounts after Tesco stopped offering them. I found out about 2 mobile apps called Chip and Plum. Chip has its own app while Plum uses Facebook messenger. Both are asking for my online banking username and password to allow me to link my accounts to the apps. I am reluctant to provide these. I was under the impression that open banking did not require you to share your password with these apps. Can anyone on MSE who uses them allay my concerns?

dealer_wins

Im not sure if its legit or not, but personally would never give any 3rd party app my online banking login details , EVER!!

fun4everyone

bluehydrangeas wrote: »

Both are asking for my online banking username and password to allow me to link my accounts to the apps.

lol
.......

Malthusian

Chip pays no interest (unless you sign up friends, which gets you 1%pa interest per friend, making it arguably the world's lamest pyramid scheme). Despite there being no coverage from the Financial Services Compensation Scheme, which means that you will lose all your money if its payment services provider fails to ringfence investors' assets correctly. (At least according to https://getchip.uk/blog/safer-saving/, and there is no indication the position has changed.)

Plum also does not pay any interest, unless you invest via RateSetter (which means your capital is at risk and it isn't comparable to a Tesco savings account). If you don't invest via Ratesetter, you again get no interest, there is no FSCS cover and you are still at risk of losing all your money if Plum's payment provider fails to ringfence its assets correctly.

So basically there is no way any reputable person would be able to reassure you about either.

Herbalus

Some people on here use them, but I am not desperate enough for a direct debit that I would give up my bank login details for them.

I think I would rather close down the accounts that need the direct debit.

ozaz

I'm no expert, but my understanding is this....

Under the EU Payment Services Directive 2 you are allowed to share your banking credentials with 3rd parties who are authorized as Account Information Service (AIS) or Payment Initiation Service (PIS) providers. Your bank can't hold you responsible for any unauthorized transactions following your sharing of your login credentials with such entities.

The UK's Open Banking initiative is related but different. It's an attempt to establish a set of standards by which banking data can be accessed without the need to provide login credentials. The main high street banks were compelled to release APIs for this purpose a few months ago, but it's not clear to me if there is a deadline from which AIS and PIS providers have to start using them. Certainly at the moment they are not compelled to use them.

The above is based on this page...
https://www.fca.org.uk/consumers/account-information-and-payment-initiation-services

Both Chip and Plum are on the FCA register, so I think they can be considered "legit"
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=0010X000047TqmEQAS
https://register.fca.org.uk/ShPo_FirmDetailsPage?id=0010X000046DDoRQAW

However, neither appear to be registered as AIS or PIS providers so presumably that means the PSD2 cover mentioned above does not apply if they are used

Here's a list of FCA registered AIS/PIS providers