What is Open Banking?

Thanks to Open Banking, millions of consumers and businesses around the world are discovering innovative and secure ways to manage their money. Open Banking enables people to safely share their bank and credit card transaction data with trusted third parties. This has created a whole new world of apps and services. For example, consumers and businesses can make and receive account-to-account payments without using debit or credit cards. Open Banking is changing the face of finance.

New financial opportunities.

Under Open Banking, banks securely share the financial information of consenting customers using Application Programming Interfaces (APIs). Authorised fintech companies use that data to create innovative services such as personal financial management apps and lending marketplaces. Citizens can take control of their finances. Small businesses can manage cash and payments more effectively. Using Open Banking, increasing numbers of online merchants are able to receive account-to-account payments straight from a customer’s bank account. These merchants avoid card fees, reduce the risk of fraud and enjoy faster clearing of funds.

A swifter payments ecosystem.

Open Banking will have an impact on nearly all walks of life. According to JP Morgan, economies that embrace open data could see gains of 1% to 5% in their GDP by 2030[1]. In the financial services sector, Open Banking is levelling the playing field and creating a new ecosystem. Lenders can accelerate loan applications, insurance companies can develop new products, and financial institutions can offer green banking services. Open Banking enables merchants to take payments instantly from a payee’s account, with better security and an improved customer experience. For merchants, these payments can be up to 80% cheaper than card payments[2].

The challenges on the road ahead.

Open Banking is transforming business models throughout the world of financial services. Businesses need to define their place in this new ecosystem. According to CapGemini’s 2022 payment report, although banks have embraced Open Banking the majority are still not ready for the API economy[3]. For their part, many consumers need to be convinced of the security of Open Banking. Providers need to improve the user experience. Especially for account-to-account payments, customer education is essential. This will largely be the responsibility of merchants[4].

Solutions & who we serve

Worldline is one of the world’s leading Open Banking providers. We empower banks to explore new economic models and we help fintechs seize the opportunities opened up by Open Banking platform. For merchants, Worldline Account-to-Account Payments allows major online brands to launch their own custom-branded payment method.

Further resources