The Open Banking Era in Payments

"Today, in 2024, still most transactions happen using Cash or Cards.

The card schemes, Visa and Mastercard have been controlling the payment realm for decades as card transactions run on their network.

👉 Open Banking disrupts that.

With access to payments data, Banks (Chase, Monzo Bank) and Payment Service Providers (Nuvei, Adyen) and 3rd-party providers (Plaid, Tink) can disrupt the traditional card payment model and cut out intermediaries by settling directly from the consumers bank account to the Merchants.

Before Open Banking became available, consumer financial data was controlled by big banks.

Now, consumers can manage their financial information and access it across different platforms - receiving a smoother, more personalized experience in the process.

Open banking uses Application Programming Interfaces (#APIs) which are software intermediaries that let two programs communicate with each other.

While there are risks of using open banking platforms, APIs provide a measure of safety when sharing financial information.

Once a 3rd-party provider receives the data from your bank, it can use the information to offer you personalized solutions.

Apps like MINT aggregate your data using open banking APIs, which consumers consent to when accepting the T&Cs.

From a Merchant perspective, this will:

► Reduce fraud tremendously by making sure the funds are available

► Increase margins by cutting out the middle-man (one less fee).

► Improve conversion rates while improving the customer experience.

► Enhance security related to Payments for their consumers

Etc.

Other organizations such as Thunes are leveraging that same Open API through a collaboration with TrueLayer to create an agnostic payment network that connects consumers to banks, merchants, digital wallets and neobanks.

Open API's will ultimately enable more FinTech services to be offered seamlessly."

Author

AiUTOMATING PEOPLE, ABN ASIA was founded by people with deep roots in academia, with work experience in the US, Holland, Hungary, Japan, South Korea, Singapore, and Vietnam. ABN Asia is where academia and technology meet opportunity. With our cutting-edge solutions and competent software development services, we're helping businesses level up and take on the global scene. Our commitment: Faster. Better. More reliable. In most cases: Cheaper as well.

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