• New platform supports financial institutions and third parties in crafting their Open Banking future
  • New research by Ovum supports the need for collaboration across the ecosystem to address technical challenges

Amsterdam, 4 June Mastercard today unveiled its new suite of Open Banking Solutions™, market-leading applications and services to underpin, enable and safeguard greater choice of financial services across Europe. The four solutions, designed to support financial institutions and third party providers (TPPs) in crafting their Open Banking futures, are as follows:

  • Open Banking Connect – A single connection to financial institutions’ Open Banking functionality, providing TPPs with scale, resilience and speed to market.
  • Open Banking Protect – Real-time verification of TPP registration status combined with monitoring and alerts to reduce exposure to liability and fraud.
  • Open Banking Resolve – A centralised enquiry and dispute resolution service to provide clarity, consistency and transparency.
  • Open Banking Consulting Services – Professional advice and hands-on support to help financial institutions define and execute their Open Banking strategy.

Several initial partners based in the launch markets of the UK and Poland, including Kikapay, Streeva, Tribe Payments, Alior Bank and mobile payment app provider DiPocket, have already signed letters of intent with the goal to activate the suite of services. This reflects that the focus on Open Banking solutions is intensifying across Europe and more generally throughout the global payments industry.

Mastercard’s new solutions are supported in new research from Ovum[i], who found that delivering on the promise of Open Banking will require market participants to come together to address technical challenges in three key areas:

  1. Developing standardised mechanisms by which banks and TPPs interact
  2. Establishing ecosystem-appropriate solutions to minimise exposure to fraud
  3. Providing clarity and consistency in how to manage enquiries and resolve disputes

Educating consumers around the potential benefits of Open Banking will be critical to enabling adoption at scale. Banks should consider how to help their customers discover and access solutions that are proven to be both safe and reliable, while being a seamless addition to the overall experience. Both fintechs and traditional financial institutions need to deliver that trust through a set of rules and mechanisms that are collectively agreed-upon and overseen.

In what is viewed as a critical year for Open Banking, Mastercard’s Open Banking Solutions™ are already supporting financial institutions and TPPs in navigating the opportunities and challenges of the new ‘API economy.’ In the UK, Open Banking has gained considerable momentum in recent months, due to the emergence of a growing number of third parties, including innovative fintechs, and an improvement in the performance of banks’ APIs. Recent OBIE data in March 2019[1] shows an almost 30% month-on-month increase in usage of Open Banking services. The notable growth and focus around Open Banking is also expected to be replicated in full force in Europe when PSD2 comes into full effect in September 2019.

Jim Wadsworth, SVP Open Banking at Mastercard, comments:

“As financial institutions and TPPs across Europe, and beyond, look at how they can capitalise on Open Banking to grow their business whilst better serving their customers, the need for trusted partners with international reach and specialisation in security and payments technology is obvious. Mastercard Open Banking Solutions™ will provide the sector with expert advice, leading-edge technological support and fills a gap that will provide peace of mind to end users, which in turn will support Open Banking adoption.”

Alex Reddish, Chief Commercial Officer at Tribe Payments comments:

“At Tribe Payments we are committed to delivering best in class solutions to our partners and are increasingly looking for products that solve problems and add value for them. We regard Open Banking as a significant opportunity. However, there are challenges that still exist in the ecosystem which is why we are leveraging Mastercard Open Banking Solutions™. Mastercard’s considerable expertise in operating and supporting global banking and payments systems, provides us with the reassurance and credibility to help us deliver secure transactions, for example through use of their fraud monitoring and real-time verification tools. We are delighted to be working with Mastercard to be able to offer this to our partners.”

-Ends –

About Mastercard

Mastercard (NYSE: MA), www.mastercard.com , is a technology company in the global payments industry. Our global payments processing network connects consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.

Contact information: philipp.bruechart@mastercard.com

References

[1] https://www.openbanking.org.uk/providers/account-providers/api-performance/

[i] Delivering on the promise of Open Banking. White Paper from Ovum. May 2019. Ovum conducted a series of interviews with leading thinkers and market participants from across the value chain, including banks, regulatory bodies, those involved in standards development, and the fintech ecosystem