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1、Key Media Partner:Insights into Payments and BeyondOpen Finance Report 2024The Growing Potential of Open InitiativesRELEASE VERSION 1.0NOVEMBER 2024COPYRIGHT THE PAYPERS BVALL RIGHTS RESERVEDTEL:+31 20 893 4315 FAX:+31 20 658 0671MAIL:EDITORTHEPAYPERS.COMContact usFor inquiries on editorial opportun

2、ities please contact:Email:To subscribe to our newsletters,click hereFor general advertising information,contact:Mihaela MihailaEmail:Open Finance Report 20243THE PAYPERS|OPen FInance RePORT 2024This year has been pivotal in the journey of Open Banking and Open Finance,as the financial world continu

3、ed to evolve at a breakneck pace.What first emerged as a regulatory mandate in select markets turned into a mature,global movement,redesigning how consumers and businesses access and interact with financial services.Exceeding the scope of data sharing,Open Banking and Open Finance foster an ecosyste

4、m of continuous innovation,flourishing partnerships,and improved customer experience.From customisable financial management tools to instant,cross-border payments,the potential of an open financial world is vast and it seems we are still at the beginning of the journey.Through this report,we sought

5、to capture once again the pulse of this beaming industry,at a time when the right mix of trust,collaboration,and technology is more important than ever before.We sat down with industry experts,banks,and service providers to provide our readers with deep insights into the successes,challenges,and fut

6、ure opportunities in Open Banking and Open Finance.The present whitepaper is designed for all financial industry shareholders,ranging from financial institutions and fintech innovators to regulators and consumers.The current financial landscape is shaped by evolving regulations across the globe,emer

7、ging tech and AI advancements,and an ever-demanding user base.One thing remains clear:the future of Open Banking and Open Finance exceeds the realm of compliance it is all about creating value.The reports main themes:Recent global developments in Open Banking and Open Finance;Smart data and the futu

8、re of payments;Open Banking and its role in fraud prevention;The latest progress in Open Banking and Open Finance regulations;Regional perspectives;Operational challenges and opportunities;Innovative solutions and most promising use cases;Latest insights into Open Banking payments;A global mapping i

9、dentifying the key players in each major category.We hope that our report will provide insights to ignite and inspire bold strategies,encourage deeper collaboration,and,ultimately,help accelerate the transformative power of open initiatives.enjoy the read!ForewordMirela CiobanuLead Editor at The Pay

10、persVlad MacoveiSenior EditorThe Paypers4THE PAYPERS|OPen FInance RePORT 2024A special thank you to our partners and contributorsContributors:Key Media Partner:5THE PAYPERS|OPen FInance RePORT 2024Table of ContentsForewordIntroduction to Open Banking and Open FinanceOpen Banking:the Consumer Revolut

11、ion in Payments|Johan Tjrnberg and Alexandre Gonthier,TrustlyThe Brave New World of Open Finance|Don Cardinal,FDXSmart Data and the Future of PaymentsHow Smart Data Is Enhancing the Payments Experience|Mark Munson,MoneyhubWhat Role Does Open Banking Play in the Transition to a Smart Data Economy?|In

12、terview with Henk Van Hulle,OBLOpen Banking and Fraud PreventionHow Can Open Banking Reduce Fraud?|Henrik Hodam,WorldlineOpen Banking and Open Finance RegulationHow FIDA Opens Unprecedented Opportunities:5 Innovative and Concrete Use-Cases|Anne-Sophie Morvan and Alexandre Keilmann,LUXHUBUnlocking Op

13、en Banking:Overcoming Political and Operational Barriers|Mike Woods,KonsentusEU Open Finance:the Main Discussions in the FIDA Proposal|Emanuel van Praag,Kennedy Van der Laan and Eugerta Mui,Erasmus University RotterdamOpen Banking and Open Finance:Regional PerspectivesGathering Pace:the Current Stat

14、e of Open Banking Payment Adoption in the UK|Andy Wiggan,GoCardlessOpen Banking in the US Recent Developments and Key Players|Vlad Macovei,The PaypersLatin Americas Path to Open Finance|Interview with Carmela Gmez Castelao,BBVAOperational challenges and Opportunities in Open BankingUnlocking Seamles

15、s Payments:Ivys Role in the Future of Instant Bank Payments|Interview with Ferdinand Dabitz,IvyOpen Banking Payments From Card Alternatives to Instant Settlements|Interview with Nikogiannis Karantzis,ISX FinancialInnovative Solutions in the A2A Payments LandscapePay by Bank:Driving the Future of Sea

16、mless and Secure Payments|Ian Morrin,Tink,A Visa SolutionThe SPAA Scheme:a Transformative Step for Europes Payment Ecosystem|Oana Ifrim,The PaypersThe Wero Wallet:a New Payment Sheriff Hits Town|Tino Meissner,Deutsche BankWho Is Who The Open Banking and Open Finance LeadersWho Is Who The Open Bankin

17、g and Open Finance Leaders(Infographic)Company Snapshots3 6 7 9 11 12 14 16 17 19 20 22 24 30 31 33 36 38 39 41 43 44 46 50 52 53 67 Trends and Players Shaping the Payments IndustryIntroduction to Open Banking and Open Finance 7THE PAYPERS|OPen FInance RePORT 2024The way people pay is changing and t

18、his is driven by Open Banking.At Trustly,we see how this innovation is reshaping the financial landscape,offering faster,more secure,and cost-effective payment options.Over the next 12-18 months,expect even more.Open Banking will expand in unimaginable ways,bringing benefits to both consumers and me

19、rchants.The promise of Open BankingOpen Banking enables consumers to make payments directly from their bank accounts,bypassing traditional intermediaries like card networks.This technology with its streamlined processes is already showing significant benefits for businesses and consumers across the

20、world.KeymerchantbenefitsofOpenBanking:Lowercostsformerchants:by eliminating card network fees,Open Banking reduces transaction costs for businesses,which can lead to price drops for consumers.Improved conversion rates:Open Banking simplifies the payment process,leading to higher checkout conversion

21、 rates as fewer steps result in fewer abandoned transactions.Upgradedsecurity:with StrongCustomerAuthentication(SCA),Open Banking offers a higher level of security,reducing fraud risks compared to traditional card payments.KeyconsumerbenefitsofOpenBanking:While the advantages for merchants are clear

22、,consumers will also experience significant benefits from Open Banking:More payment choices:Open Banking gives consumers an additional,secure payment option thats faster and more convenient than cards.Lower prices:as merchants reduce costs by eliminating card fees,these savings can be passed on to c

23、onsumers,especially in sectors like retail,travel,and entertainment.Bettersecurity:Open Banking payments are authenticated directly through the consumers bank,offering a more secure experience and reducing the risk of fraud.Instant payments:Open Banking payments are processed in real time,allowing c

24、onsumers to receive immediate access to services without delays often caused by card payments.Paymentflexibility:Trustlys Open Banking platform allows for innovative,flexible payment solutions that help consumers better manage their budgets and cash flow.Open Banking:the Consumer Revolution in Payme

25、ntsTrustlyTrustly,a leading global Open Banking platform,facilitates instant account-to-account payments for 112+million consumers globally.Led by Group CEO Johan Tjrnberg and Americas CEO Alexandre Gonthier,Trustly will process USD 100 billion in payments by 2024,revolutionising the industry throug

26、h direct payment innovations.AlexandreGonthierCEOTrustly Inc.JohanTjrnbergCEOTrustly Group8THE PAYPERS|OPen FInance RePORT 2024Success stories:whos leading the charge?Several major industries have already adopted Open Banking through Trustly and experienced major improvements:1.UKgovernment:the comp

27、anys collaboration with HMRC,by volume,has become the single biggest use case for Open Banking payments in the UK with GBP 30 billion of tax payments processed since launch.2.ACEMoneyTransfer:since the partnership began in 2021,the company has seen a staggering 40%growth in remittance.3.PointsBet:on

28、e of the standout success stories comes from PointsBet,which saw a 210%growth Year-over-Year in completed transactions by improving approval rates.These examples highlight how Open Banking is delivering tangible results for businesses across industries.Trustlys Open Banking platform:powering smart p

29、aymentsa key driver behind our Open Banking success is Trustlys proprietarydataengine.HowTrustlyimprovesOpenBanking:Optimisedpaymentflows:Trustly helps merchants streamline the payment process by analysing real-time data,reducing friction and improving conversion rates.Fraud prevention:Trustlys adva

30、nced analytics help identify and mitigate fraud risks,ensuring a safer environment for both merchants and consumers.Boostedperformance:Trustly enables merchants to customise the payment experience,further improving customer satisfaction and driving higher completion rates.Consumerinsights:Trustly he

31、lps merchants leverage Open Banking Data to power personalise consumer experiences based on their spending habits.The evolution of Pay by BankOne of the most exciting areas for Open Banking is Pay by Bank.As more businesses embrace subscription models,the reliability of recurring payments is crucial

32、.Open Banking offers several advantages over traditional card payments.WhyOpenBankingimprovespayments:Increased conversion:more payment methods with intelligent remember-me functionality help drive conversion for merchants.Lowercostsformerchants:merchants,especially those with high-volume transactio

33、ns,can save significantly by bypassingcardfees,making payments more cost-effective.Reducepaymentfailures:with Open Banking,failed payments are minimised,leading to a 25%reduction in involuntary churn.Open Banking avoids issues with card payments,such as expiration by directly connecting to bank acco

34、unts,ensuring a higher success rate for recurring transactions.Improvedcustomerexperience:for consumers,Open Banking offers a setitandforgetitexperience.Once their bank account is linked,theres no need to update payment details,ensuring uninterrupted service.Reducedfraud:Open Banking allows access t

35、o advancedriskanalysis,built on processing hundreds of millions of high-risk payments transactions.Final thoughts:a collaborative vision for the futureAs leaders in the payment industry,we believe Open Banking will transform how consumers and merchants interact.Its potential for higherconversionrate

36、s,reducedcosts,and improved security will drive adoption across multiple industries.For subscription-based businesses,in particular,Open Banking will provide a more reliable and seamless solution for recurring payments,reducing churn and improving the customer experience.Click here for the company p

37、rofile9THE PAYPERS|OPen FInance RePORT 2024The Brave New World of Open FinanceDon Cardinal,Managing Director of FDX,elaborates on member innovations leveraging Open Finance and FDX.Don Cardinal Managing Director FDXMuch ink has been spilt on the topic of Open Banking,but I wanted to take a step toda

38、y into a larger world of Open Finance.Whereas Open Banking is most commonly associated with current accounts(checking,savings,credit cards),Open Finance is concerned with the totality of your financial world.While current accounts are important in the personal financial management use case,when you

39、look at more sophisticated needs,liability accounts like auto loans,home loans,and student loans are required to help give context to a personal balance sheet.Finally,the addition of investment and retirement accounts gives the wealth management user a full 360-degree view of the consumers financial

40、 health.Additional use cases such as account and balance verification,bill payment,and payroll needs like verification of income/employment and pay stub retrieval along with the ability to retrieve tax forms like W2,1098,1099,and capital gain statements for tax preparation,round out the most common

41、consumer demands for linking accounts.These are all important use cases for consumers and small businesses,but it is also important to address why data providers like banks,brokers,and others would benefit from data sharing.We know that one in three digitally-enabled consumers has shared access to t

42、heir financial data in the last year and similar polls of financial institutions tell us that at least one-third(if not more)of their online banking traffic was credential-based access(screen scraping)to power these use cases.FDX10THE PAYPERS|OPen FInance RePORT 2024Imagine if a data provider could

43、reduce one-third of its entire load on its online infrastructure in favour of a portal 100 times more efficient than screen scraping.The introduction of secure APIs does just that.Lowering costs of hardware overall.One of the other uses by data providers is data-in,to pre-fill new account applicatio

44、ns as well as provide strong signals for Know Your Customer(KYC),including account tenure at a predecessor institution.Better data means faster,more accurate decisions leading to fewer abandons or declines,meaning more revenue for the institution.As a banker for a number of years,one of the biggest

45、questions we had was What was our share of a given customers wallet?We often had to try to infer based on monies in and out,but with Open Finance,you can link to other institutions and know in real time what your share of wallet is.This allows you to be almost surgical in your marketing and product

46、offering.All this is made possible by secure,permissioned data sharing via a common API standard.Looking forwardAvoid FUD(fear,uncertainty,and doubt).Many jurisdictions have implemented Open Banking(the UK,EU,Australia,Brazil,among others)and there has yet to be a mass exodus of consumers in any of

47、these nations.Why?If you are confident in your product,your pricing,and your service,making data available via an API does nothing to incent consumers to leave,rather the opposite.The largest credit union in Brazil said at the FDX Spring 2024 Summit that they saw a net increase in digital engagement

48、 and accounts per customer after Open Banking was introduced.A last bit of advice:APIs are a net new channel and will be the third leg in the digital stool.Online,Mobile,and API will be the troika.APIs are much more efficient and can deliver data that cannot be displayed visually.As you make your pl

49、ans for 2025 and 2026 for your digital roadmap,you would be remiss in not including Open Finance APIs in your product mix.Your competitors are.Digital teams need to think of APIs as a net new channel,just as Online and Mobile became their own channels.Trends and Players Shaping the Payments Industry

50、 Smart Data and the Future of Payments12THE PAYPERS|OPen FInance RePORT 2024How Smart Data Is Enhancing the Payments ExperienceMark Munson is Divisional MD for Moneyhub Payments.Moneyhub Payments combines Open Banking,Open Finance,and Open Data technology to facilitate faster,more secure,and lower-c

51、ost transactions.The applications of Open Banking Smart Payments are vast and can help to provide a friction-free and secure payment experience for the customer.MarkMunson Divisional MD Moneyhub PaymentsThe best of Open Banking,Open Finance,and Open Data are reshaping how businesses approach payment

52、s,decision-making,and customer engagement.At the centre of this shift is Smart Data:by combining real-time financial insights with flexible payment models,companies can increase engagement,improve processes,and unlock new revenue streams.Moneyhub integrates account Information Services(AIS)with Paym

53、ent Initiation Services(PIS).Businesses can now tap into real-time financial insights and adaptive payment options,creating solutions that meet the changing needs of todays consumers.The role of Smart Data in flexible paymentsConsumers increasingly value payment flexibility and control,many are alre

54、ady engaging with their finances through mobile apps 65%of consumers primarily access their bank accounts this way.Open Banking can play a critical part in meeting these expectations,and companies that integrate Smart Data into their payment offerings will stay competitive.Consumers aged 21-40 and t

55、hose earning over GBP 60,000 are driving the demand for Open Banking payment options,with a preference for flexible,automated payments and tools that empower financial management.This is particularly relevant to businesses moving towards consumption-based models,where flexible payments and data insi

56、ghts are enabling more tailored experiences.How Smart Data enables consumption-based payment modelsWith the rise of consumption-based payment models,Smart Data and Open Banking payments have become essential tools in offering adaptive,user-centric payment options.These models allow consumers to pay

57、based on their actual usage or consumption,rather than fixed schedules.This flexibility,combined with AIS insights,enables businesses to personalise payment experiences and build consumer trust.Consider an insurance provider offering dynamic,consumption-based premiums that adjust based on real-time

58、data insights.By integrating AIS data,insurers can instantly verify consumer account information,assess financial health,and offer personalised,usage-based billing.In the case of motor insurance,or as a consumption-based excise proposition,policies can be dynamically priced based on miles driven,dri

59、ving behaviour,or time spent on particular roads.AIS data enables insurers to assess affordability and offer payment plans that reflect the customers actual usage.This approach supports affordability and gives customers the flexibility to adapt their coverage,improving satisfaction and retention whi

60、le expanding reach among consumers seeking adaptive coverage options.MoneyhubBusinesses can now tap into real-time financial insights and adaptive payment options,creating solutions that meet the changing needs of todays consumers.13THE PAYPERS|OPen FInance RePORT 2024Debt management and collections

61、 with Pay-by-Link In the debt management and collections space,Pay-by-Link solutions are transforming how consumers make repayments,especially in the context of financial hardship.These innovative solutions provide a secure way for consumers to make payments conveniently with just a banking app.Debt

62、 collection firms can send personalised payment links via email,SMS,or in-app notifications.These options allow consumers to make one-off payments,set up payment plans,or spread payments over a defined period without having to share bank account details.Utility and telecom companies can serve custom

63、ers facing payment challenges with Pay-by-Link by offering a flexible way to settle overdue balances in instalments.AIS data enables businesses to pre-approve payment plans based on verified account information,reducing default risk and providing a responsible approach to debt management.By combinin

64、g AIS with Pay-by-Link,businesses can create seamless,personalised payment experiences,verifying accounts and tailoring options to suit the customers financial profile including affordability and vulnerability checks.This is crucial in maintaining customer relationships while managing debt responsib

65、ly.Account verification and personalised paymentsAs businesses adopt new payment models,AIS become essential for account verification and managing customer affordability.AIS allow companies to confirm bank account ownership and validate financial capacity,supporting responsible billing and collectio

66、ns practices.Through instant account verification,companies can ensure that payments and refunds are directed to the correct account,reducing fraud risk and eliminating payment delays in sectors like debt management.More consumers are demanding personalised payment plans.By analysing spending patter

67、ns,businesses can customise payment options to suit each customers financial situation.Real-time insights into financial behaviours allow companies to offer customised payment schedules or spread missed payments over defined periods,ensuring responsible management and satisfaction.Smart Data and Pay

68、ments for improved efficiencyThe integration of Smart Data and flexible payment options will drive new business models that upgrade operational efficiency and provide consumers with the flexibility they seek.Open Banking payments and account insights allow businesses to streamline cash flow,reduce t

69、ransaction costs,and build deeper consumer trust.These benefits enable companies to improve profitability and position themselves as leaders in consumer-centric payment solutions.Consumers are increasingly seeking seamless,flexible,and adaptive payment solutions that cater to their unique financial

70、situations.Smart Data and Open Banking payments make these experiences possible.With Moneyhubs combination of Open Data capabilities,businesses can offer payment solutions that are both adaptive and responsive to customer needs,simplifying payment management and improving satisfaction.Businesses tha

71、t use Smart Data to create consumption-based models and provide real-time account analysis will not only upgrade customer satisfaction but also build stronger,trust-based relationships.By combining AIS with Pay-by-Link,businesses can create seamless,personalised payment experiences.Click here for th

72、e company profile14THE PAYPERS|OPen FInance RePORT 2024Henk Van Hulle is the CEO of Open Banking Limited(OBL),the organisation that developed,maintains and promotes the Open Banking Standard.His key priority is to continue to work with government,regulators and the Joint Regulatory Oversight Committ

73、ee(JROC)to ensure the future success of Open Banking,supporting the move to a smart data economy.HenkVanHulle CEO OBLHow will Open Banking evolve over the next five to ten years and what role will OBL play?This year has been pivotal for OBL as the final CMA Roadmap has been completed and we are now

74、looking to transition to a future entity and a Long-Term Regulatory Framework that can harness our successes.This includes developing new commercial propositions and supporting the move to a smart data economy.We will move to new arrangements agreed by the JROC but continue to protect the ongoing re

75、quirements of the Order to deliver benefits to consumers,businesses,and the wider economy.OBL will continue to maintain the Open Banking Standard and reasonably promote Open Banking to encourage mass adoption.In September 2024 we reached 11.16 million users,and we hope this impressive growth will co

76、ntinue.Our core services maintenance of trust services and a recognised Standard among other things could also be used to support digital ID and to support the mass adoption of smart data schemes with verification services.What factors will influence the next phase of Open Banking?Given the Governme

77、nt has now introduced the Data Use and Access Bill,the UK can lead the next wave of this financial innovation.We hope that the Government will take a strategic,top-down approach and that government ministers will be given powers to mandate participation in smart data schemes in key economic sectors

78、including energy,finance,telecoms,and retail.Seeing these smart data schemes in day-to-day use for many consumers and businesses will be a natural evolution of Open Banking,and edge us closer towards a smart data economy.Open Banking continues to expand globally.Considering the UKs experience,what l

79、essons could be applied to new markets?We started life as a competition remedy,so we need to give credit to the regulators for that centralised and mandated approach,which created a blueprint that has been emulated in more than 60 countries.Now we are one step closer to moving to a sustainable comme

80、rcial and regulatory framework.Open Banking Limited(OBL)OBL,ledbyHenk,hasbeenengagingtheecosystem,thefintechindustry,regulatorsandgovernmentstakeholderstobuildonOpenBankingssuccessandhelpdevelopasmartdataeconomy.Smart data schemes in day-to-day use for many consumers and businesses will be a natural

81、 evolution of Open Banking,and edge us closer towards a smart data economy.15THE PAYPERS|OPen FInance RePORT 2024International markets need global standards ensuring cross-border data flow interoperability and a central body to monitor and enforce compliance.Markets cannot operate in silos,and this

82、presents a powerful opportunity to collaborate and consult internationally.With data-enabled exports from the UK to the EU alone valued at about GBP 91 billion,the economic potential of a robust global standard cannot be underestimated.With the rise of Open Finance and Embedded Finance models,how do

83、 you see Open Banking transitioning to a more comprehensive financial ecosystem?While Open Banking has made good progress,its benefits have so far been limited to payments and data from current accounts.Open Finance will extend these benefits to mortgages,pensions,investments,and savings.We are alre

84、ady seeing its impact on home-buying,for example,where effective data sharing between organisations in the chain can speed up mortgage lending and streamline a house purchase.We are also seeing major pension providers use Open Banking,building single-view dashboards for customers so they can see all

85、 their pensions in one place.Industry collaboration and innovation are already reaping rewards,and a regulatory nudge will support further momentum.This will help to increase engagement with all financial services,as well as build trust and familiarity with data sharing,where we still see some hesit

86、ancy.Harmonisation will also help adoption,particularly concerning digital verification.An upgraded financial ecosystem,and personal data mobility,could also boostUKGDPbyGBP30.5billion.How is OBL ensuring that innovations continue to prioritise consumer trust while enabling seamless access to financ

87、ial services?Trust and security have always been integral to Open Banking.We have secure data-sharing practices,use high-quality APIs and encryption,and run a trust framework which is secure and protected.We expect the long-term framework will prioritise consumer protection and how to effectively ta

88、ckle fraud as an industry.Consumers can feel confident that the technology is built on the same secure systems used by banks and fintech firms,while the firms which produce Open Banking products and services are regulated by the Financial Conduct Authority.In terms of trust in data sharing,its also

89、vital that people understand that they are completely in control of what they share,with whom and for how long and that they can withdraw their consent at any time.Consent and trust are key to our currency.Many people have used Open Banking without even realising it to make a payment or to connect t

90、heir business banking data to their accounting software.As adoption and familiarity with the increasing number of products and services,grows,we hope that people will feel confident in using Open Banking without needing to understand the engineering behind it.International markets need global standa

91、rds ensuring cross-border data flow,interoperability and a central body to monitor and enforce compliance.Trends and Players Shaping the Payments Industry Open Banking and Fraud Prevention17THE PAYPERS|OPen FInance RePORT 2024How Can Open Banking Reduce Fraud?Henrik Hodam is a Senior Product Manager

92、 in Open Banking at Worldline,which helps businesses accelerate their growth journey.With advanced payments technology,local expertise,and solutions customised for hundreds of markets and industries,Worldline powers the growth of over one million businesses worldwide.HenrikHodam Senior Product Manag

93、er WorldlineUsing Open Banking to prevent fraud and ensure complianceThe core of Open Banking was provided by the introduction of PSD2 which was designed to drive innovation and increase competition in financial services by introducing open APIs to access account data and payment initiation.Account

94、data can be used to improve fraud prevention and risk management.Bank transactions can be used to classify customers and detect suspicious activities quickly before the damage is made,thus making payments safer or improving the assessment of business risks.Securing SEPA Direct Debit transactionsSEPA

95、 Direct Debit(SDD)allows recurring payments across SEPA countries.Customers provide their bank account numbers for periodic debits;however,fraudsters can misuse this method by using someone elses IBAN,leading to unauthorised debits.The real account holder might notice the issue later,cancelling the

96、payment and causing losses for the merchant.IBAN validation within KYC(Know Your Customer)and KYB(Know Your Business)protocols can verify account holder details,ensuring payments are correctly directed.This reduces fraud,safeguards against financial losses,and maintains trust with clients.Financial

97、risk managementManaging financial risk is essential for merchants that provide goods and services before payment,and in lending or leasing businesses.Providers need to understand a consumers financial situation to accurately assess and manage associated risks,and Open Banking provides crucial financ

98、ial data for this.Correct IBAN usage for upcoming payments,mostly credit transfers,is vital to avoid financial losses.With Open Banking,businesses access real-time data to better understand clients financial health,allowing them to make informed,data-driven decisions.This minimises the risk of defau

99、lts,improves the accuracy of risk evaluations,and upgrades the financial products offering while maintaining client trust.WorldlineIBAN validation within KYC and KYB protocols ensures payments are correctly directed,reducing fraud and maintaining client trust.18THE PAYPERS|OPen FInance RePORT 2024Im

100、proving financial services with secure data access and complianceAccount Information Services(AIS)enable payment institutions to access and retrieve customers financial data securely and in real time,with their explicit consent.This includes transaction histories and IBAN.AIS play an integral role i

101、n providing customised financial insights and improved customer experiences.To ensure this data is accessed securely,Strong Customer Authentication(SCA)is applied,requiring multi-factor authentication to verify the users identity.Access to data involves a combination of something the customer knows(

102、i.e.a password),something they have(i.e.a smartphone),and something to prove who they are(i.e.a fingerprint),providing robust security against unauthorised access.Moreover,effective consent management under GDPR is key.Customers are clearly informed about how their data will be used,and they provide

103、 clear,explicit consent.This transparency not only complies with GDPR but also improves trust,as customers feel more secure knowing their data is handled responsibly.IBAN check to upgrade security and compliance With Open Banking,accurate IBAN checks are essential for preventing fraud and ensuring c

104、ompliance.Financial institutions and businesses must accurately map IBANs to the corresponding account holder data to ensure that payments are correctly directed.If this data isnt provided,the responsibility should fall on the entity managing the account.For example,when a bank reviews credit applic

105、ations,it uses IBAN checks to verify the applicants bank details.By ensuring the IBAN matches the account holders information,the bank verifies that the credit funds are sent to the right person,safeguarding against fraud.Credit scoring to improve financial decisions and securityReal-time credit sco

106、ring is key in Open Banking for accurate financial credit assessments.For example,a bank can use credit scoring to check a credit applicants ability to repay a loan.By accessing the applicants financial data with their permission,the bank gets a clear picture of their finances,reducing the risk of d

107、efaults.This process includes strong authentication,onboarding KYC,and e-signature to ensure security and compliance.With quicker approvals and automated data entry,customers have a smoother experience,while banks make better decisions with credit assessments.Worldlines expertise in Open BankingThe

108、global adoption of Open Banking by proactive players is crucial for fighting fraud.For businesses,Open Banking offers several advantages.Your customers also benefit from secure digital registration,with no manual paperwork and instant verification.Worldlines expertise and solutions in Open Banking i

109、mprove security,reduce fraud,and ensure compliance with regulatory standards,benefiting both businesses and consumers.IBAN verification and shared data ensure that subscribers own the provided account and secure their subscriptions.Additionally,our advanced Open Banking solution in credit scoring al

110、lows customers to quickly and accurately assess their consumers creditworthiness,helping them to make better-informed decisions with confidence.Click here for the company profileOpen Bankings real-time data enables precise financial risk management,upgrading security,and improving decision-making.Tr

111、ends and Players Shaping the Payments Industry Open Banking and Open Finance Regulation20THE PAYPERS|OPen FInance RePORT 2024The FIDA draft proposal,published almost 18 months ago,came as a bombshell in the financial services industry.Even if all players knew what to expect,the scope of the Financia

112、l Data Access framework confirms many opportunities and challenges.We know about Open Banking and have heard about Open Insurance and Open Wealth initiatives,but are we entering the era of Open Everything?These 5 Open Finance use cases prove it.1.enhanced credit scoring|Innovation:Usefulness:With th

113、e users permission,credit institutions can already use Open Banking to gather financial information,pulled from payment accounts in real time,and make quicker and more informed creditworthiness decisions.With any type of account now available with Open Finance savings,crypto assets,securities,etc.sc

114、ores will be more and more accurate and better decisions will be made,eventually benefiting both the users and the lender.Also,it is interesting to note that under FIDA,data users will have the possibility toaccessdatausedinfirmscreditworthinessassessments.This will expedite data collection and cred

115、it decisions.2.Suitability&appropriateness assessments|Innovation:Usefulness:Suitability assessments required under regulations(MiFID II and IDD,respectively)are costly and usually not very user-friendly.This step might nevertheless soon no longer be required,at least not exactly in the same way.How

116、 FIDA Opens Unprecedented Opportunities:5 Innovative and Concrete Use CasesLUXHUBAnne-Sophie Morvan,Chief Commercial Officer at LUXHUB,is passionate about Open Banking and Finance,with a background in IT/data protection law.Alexandre Keilmann,Marketing Manager,aims to place LUXHUB at the center of O

117、pen Finance through creative strategies.LUXHUB leads in Open Finance and offers compliance and data aggregation solutions.AlexandreKeilmannMarketing ManagerLUXHUBAnne-Sophie Morvan Chief Commercial OfficerLUXHUB21THE PAYPERS|OPen FInance RePORT 2024Financial institutions acting as data users might i

118、ndeed leverage FIDA to retrieve data collected by other financial institutions in the context of suitability and appropriateness assessments.Data users will still need to verify data accuracy,but the user experience will hopefully significantly improve,together with the customer knowledge enabling b

119、etter investment advice(see below).The access to a large set of financial data in the context of FIDA will enable financial institutions to ensure a certain diversification of their customers assets and reduce risks for both their customers and themselves.3.Investment advice|Innovation:Usefulness:Ac

120、count aggregation at its finest to provide users with personalised and data-driven financial guidance:this use case has all the ingredients to flourish in this upcoming Open Finance era.Both retail and private banks will be able to access a large variety of data,such as savings or securities account

121、s,and will thus be able to provide tailor-made investment advice to each of their customers,irrespective of their wealth.It could even be combined with robo-advisors or AI-driven platforms to,on the one hand,improve efficiency,and on the other,reduce costs for the investor.An Investment Advice servi

122、ce could first leverage FIDA APIs to source data from multiple financial institutions.It would include bank account information,investment portfolios,and more!Such a solution could then analyse and offer tailored investment advice,from asset diversification to risk reduction and the overall portfoli

123、os optimisation.4.carbon footprint tracking|Innovation:Usefulness:In the global warming emergency context and with a certain ESG aspect,one can imagine an Open Finance-powered solution that could link spending data to carbon emission tracking.In this respect,such a solution could track the carbon fo

124、otprint of the users spending or investments and also offer greener alternatives and incentives via environment-friendly products and ESG investments.5.Subscription management|Innovation:Usefulness:We can imagine an Open Finance-based solution that would track all of a users or companys subscription

125、s,to provide insights,and even negotiate,pause,or cancel services on behalf of the user/company,while automatically adjusting the monthly subscription budget based on these changes or adaptations.This use case falls into the(personal)finance management category,as we are noticing a growing demand fr

126、om consumers as well as companies willing to improve their financial wellness and expenses linked to subscriptions.This use case would be particularly relevant when combined with a global analysis of the customers wealth and monthly savings.Finding ones role in this new Open Finance ecosystemAs you

127、can expect after going through the draft regulation and reading these concrete use cases:the stakeholders will have different roles depending on the solutions described above;they may act as data holders or data users.Players must understand their role in the Open Finance value chain,knowing that st

128、aying out of this new world is not an option.At LUXHUB,weve embraced this new era:from a pioneering Open Banking hub with proven expertise in several geographies worldwide,were turning into an Open Finance enabler,with all stakeholders leveraging a mutualised,robust,and innovative platform.As a thir

129、d-party platform,the LUXHUB Open Finance Platform offers a fully operational,official,and FIDA-approved compliance product.Features range from developer portal and data users management to different environments available and security monitoring.So,are you ready for the Open Finance revolution?Click

130、 here for the company profileOpen Finance use cases are transforming financial services,from credit scoring and investment advice to carbon tracking and subscription management.22THE PAYPERS|OPen FInance RePORT 2024Unlocking Open Banking:Overcoming Political and Operational BarriersMike Woods is CEO

131、 and co-founder of Konsentus,a global provider of specialist advisory services and technology solutions to support the national implementation of Open Banking and Open Finance ecosystems.Previously an Executive Director at NatWest Bank,Mike has enjoyed a leadership career spanning retail,banking,and

132、 technology.MikeWoods CEO KonsentusOpen Banking has been hailed as a game-changer for the payments industry,offering customers more control over their financial data through new and innovative products and services.However,the path to a fully operational,safe,and secure Open Banking ecosystem is oft

133、en far from smooth.The roadblocks preventing Open Banking success fall into two main categories:political/regulatory and operational.Political and regulatory challenges can range from unclear regulatory frameworks or competing governance agendas to digital transformation being low on an election man

134、ifesto.The operational and implementation challenges can extend from regulatory overdesign to the incompatibility of legacy technology systems with new API standards.Lack of a defined regulatory agendaLooking at political challenges,defining the regulation itself is one of the most significant barri

135、ers to Open Banking adoption globally.In Latin America,several markets have been waiting some time for secondary regulation to be published and,until this happens,progress is limited.In Europe,an underlying reason why Open Banking penetration is fragmented,and adoption is perhaps lower than initiall

136、y hoped,is due to the absence of a clear and consistent regulatory framework.This has led to different interpretations of the rules and standards negatively impacting processes and costs.The lack of clarity has also made it difficult for fintechs and banks to commit to Open Banking initiatives,feari

137、ng regulatory change may negatively impact their investments.Competing regulators and election cyclesAnother major challenge is the presence of multiple regulators with overlapping responsibilities.In the UK for instance,there are three regulators with a stake in Open Banking regulation:the Competit

138、ion and Markets Authority(CMA),the Financial Conduct Authority(FCA),and the Payment Systems Regulator(PSR).All three organisations must agree before moving forward with any change to Konsentus23THE PAYPERS|OPen FInance RePORT 2024Open Banking regulation which takes time.Regulatory alignment is also

139、a factor in many other countries where financial,data protection,and competition regulators overlap but their goals may not always match.Election cycles can introduce political uncertainty,and upcoming elections may delay progress as political priorities shift.This makes it difficult for regulators

140、and the industry to work towards long-term goals.Election outcomes can bring in new governments that may reverse or delay reforms,adding to the uncertainty.Lobbying by banksEcosystem participants themselves can also slow progress.Traditional financial institutions(FIs)may see Open Banking as a threa

141、t to their business model and therefore lobby to either slow down or modify regulations.Incumbent banks may fear that giving fintechs access to customer data will dilute their control over established relationships resulting in regulatory frameworks favouring FIs,placing a heavier burden on fintechs

142、 trying to enter the market.In addition to the above,operational and technical challenges also come into play.These comprise overly complex compliance requirements,a lack of regulatory resources,a reluctance by FIs to fully embrace Open Banking,and difficulties in building trust among stakeholders.R

143、egulatory overdesign and compliance hurdlesWhile regulations like PSD2 in Europe were designed to protect consumers and foster competition,some measures,such as Strong Customer Authentication(SCA),have limited the customer experience.Regulators should be cautious of unintended consequences of regula

144、tory overdesign such as suppressing innovation.Fintechs need to learn how to position their services to attract customers and FIs need to understand how they can benefit from using Open Banking.capacity building for regulatorsFor Open Banking to thrive,regulators must have sufficient capability and

145、capacity to deliver Open Banking throughout its lifecycle including policy formation,workflow processes design,education,stakeholder relations,and project management.This is all determined by the role(s)played by the regulator but,unless adequately managed,it can become a bottleneck slowing down the

146、 development of the ecosystem.Bank readiness and willingness to investMany FIs are not yet ready to embrace Open Banking.Implementing the necessary infrastructure to support API-driven financial services requires significant investment.Banks must overhaul their legacy systems which can be costly and

147、 complex.This reluctance slows the adoption of Open Banking,as banks either delay their investment in the necessary technology or implement minimal regulatory requirements rather than fully embracing the potential of Open Banking.Trust and stakeholder managementOne of the biggest challenges in imple

148、menting Open Banking is fostering trust amongst participants which is critical for its success.Participants must feel confident that they can identify each other and seamlessly,safely,and securely interact.Trust framework technology and central directory services are the foundations of a successful

149、open ecosystem.Deploying central technology infrastructure like the Konsentus Open Trust Platform ensures a secure ecosystem is seamlessly created,managed,and maintained with participants able to exchange data and funds.While Open Banking holds immense potential,its implementation is hindered by reg

150、ulatory and operational challenges.Overcoming these barriers is crucial for Open Banking to reach its full potential enabling a more inclusive,innovative but competitive financial landscape.One of the biggest challenges in implementing Open Banking is fostering trust amongst participants this is cri

151、tical for its success.Click here for the company profile24THE PAYPERS|OPen FInance RePORT 2024The European Union(EU)is moving forward with establishing Open Finance following the proposal for a framework for financial data access(FIDA Proposal)published in June 2023.1 Currently,significant changes a

152、re being discussed by the EU legislative bodies(EU Parliament and EU Council of Ministers).This article brings attention to some key discussion points in order to reflect on how the final framework may look.Final clarity as to the text is expected in Q3 or Q4 2025,and from that moment onwards,financ

153、ial institutions have 30-32 months to implement the requirements.2General noteThe FIDA Proposal introduces an access right to a broad range of financial data(banking,insurance,investments,pensions,crypto,and more).The three actors of the ecosystem are data holders(entities who currently hold custome

154、r data),data users(entities interested in accessing customer data to offer services and products),and customers(whose permission is the enabling key to data access).Discussion point 1:FIDA readinessThe Proposal presupposes the standardisation of various financial data and respective data points for

155、them to be made available via technical interfaces.If we are talking about mortgage data,this would mean name,address,credit score,and so on.While some data are already highly standardised,some other types of data,such as demands and needs assessments for insurance products,still need to be.Not all

156、financial firms across the EU enjoy the same level of standardisation or digitisation of data in their financial sectors.This means that the implementation costs of FIDA are higher for some types of data than for others.Hence,it is being discussed that the FIDA Proposal should be implemented in thre

157、e phases based on the criterion of FIDA-readiness of data in scope.3FIDA readiness is defined from the degree of(i)standardisation and(ii)digitisation/digital availability of a certain product or service.The approach would start with the standardised data,available in a machine-readable format and d

158、igitised.In other words,it will not require much effort for data holders to make this data available,and ideally,they would build upon the EU Open Finance:the Main Discussions in the FIDA ProposalVan Praag&MuiEmanuel van Praag,attorney-at-law at Kennedy Van der Laan and professor of Fintech and Law

159、at Erasmus University Rotterdam.He specialises in Big Data,Open Finance(PSD2),and Payments.Eugerta Mui is a PhD candidate at Erasmus University Rotterdam researching Open Finance infrastructure(schemes)in the EU.EugertaMuiPhD CandidateErasmus University RotterdamEmanuelvanPraagAttorney-at-lawKennedy

160、 Van der Laan25THE PAYPERS|OPen FInance RePORT 2024experience with the Second Payment Services Directive(PSD2).Such data could be,for example,data on savings and loan accounts.The second phase would include data that are not fully standardised and complex.These data are mostly digitised but not cont

161、inuously available to customers,such as motor insurance or investments in financial instruments.The third phase would entail complex and heterogeneous data with much less standardisation,such as occupational pension data.The discussion revolves around which financial product or service data belongs

162、in which phase.Discussion point 2:data access within vs.outside schemesThe FIDA Proposal mandates data holders and data users to establish schemes with the underlying idea that such collective contracts will contribute towards the standardisation of technical interfaces for data access.An important

163、discussion point in this respect relates to whether data access can also take place outside schemes and,if yes,can data holders get paid for it.The answer is not clear from the current text.On the one hand,since scheme articles(9-12)become applicable before the rest(Article 36),it can be argued that

164、 schemes are needed for the making available of data.On the other hand,Article 2(4b)clearly states that FIDA is without prejudice to data access and use based on a purely contractual basis.This means data holders and data users can contract outside schemes for the data in the FIDAs scope.Purely cont

165、ractual basis means that parties can also agree to compensation for data access.But are data holders allowed to obtain compensation for data access outside schemes?Article 5(2)states that data holders can claim compensation only if data are made available in accordance with the rules of a scheme.But

166、 if contracts are allowed,then compensation should be possible.So,can data holders get paid for data access outside schemes?It is unclear.If compensation is not possible,then data holders can refuse access to outside schemes(unless the request is based on GDPR data portability,Article 20)and redirec

167、t interested data users to join schemes in order to get access.Big data users,however,such as bigtech,could be able to negotiate data access for free outside schemes using their market power to the detriment of data holders.If data holders can get paid for data access to outside schemes,it would be

168、more interesting for small data users to join schemes as they can achieve a better price thanks to collective bargaining.Big data users,in this case,would be able to negotiate a lower price due to market power.In any case,these questions should be clarified at the legislative level for the sake of l

169、egal certainty in the market.This discussion is essential because implementing schemes is one of the means to achieve standardisation in the market and protect the weaker parties in negotiating the price for data access through collective bargaining.Hence,for practical reasons,it favours the mention

170、ed aims of the proposal to allow access to customer data only following the rules and modalities of a financial data access scheme.Discussion point 3:gatekeeper accessOne of the first changes to the initial Commissions proposal was to exclude gatekeepers from access to FIDA data.The initial proposal

171、 did not mention them;thus,in the absence of other restrictions related to financial data,it meant that big technological companies like Google,Amazon,or Meta(Facebook)were free to access Open Finance data by obtaining the newly introduced authorisation of the financial information service provider(

172、FISP).4 The ECON Committee proposes to prohibit designated gatekeepers from obtaining the FISP licence and thus,access Open Finance data and to give specific powers to supervisory authorities to ensure that gatekeepers do not circumvent this provision through entities owned or controlled by them(Art

173、icle 18a).This amendment seems to align with the Digital Markets Act5 and the Data Act(Article 5(3),which limits gatekeepers access to new sources of data that would reinforce their market position.It would also maintain a level playing field with financial incumbents who do not enjoy the advantages

174、 of comparable vast customer databases.6 26THE PAYPERS|OPen FInance RePORT 2024However,bigtechs that act as data holders,because they have an existing financial institution licence(for example,a bank or insurance firm),can still access FIDA data.In this case,they cannot combine the FIDA data with th

175、eir other customer data(Article 6(4a).In addition,access through a non-FIDA-related contractual basis with financial institutions remains untouched(Article 2(4b).So,gatekeepers can contract separately with a bank and access the customer data they wish against compensation.They just may not use the F

176、IDA access right.Discussion point 4:FISP-as-a-ServiceThe definition of the financial information service(FIS),initially not present in the Commissions draft,has been the topic of another main discussion.This newly introduced service and its provider are inspired by the account information service pr

177、oviders(AISP)of PSD2 Open Banking.The unclarity regards the FISP-as-a-Service,7 which entails an authorised Open Finance firm that makes available customer data accessed under the FIDA proposal to a non-Open Finance firm against a fee.AISP-as-a-Service,a similar business model with payment account d

178、ata,is popular under the PSD28 and is now provided for in the definition of the account information service,in the PSD2s review(PSR/PSD3).9 The difference between the definitions of financial information service and account information service might serve as an indication that FISP-as-a-Service will

179、 not be allowed.On the other hand,Article 6(4)(aa)prohibits data users from transferring customer data to a third party without the customers explicit permission,indicating that transfer is possible,but safeguards must be complied with.There is merit in this discussion because,in some cases,it might

180、 not be interesting for a firm to go through the costs of obtaining FISP authorisation and joining financial data access schemes in order to access FIDA data.The aim is to avoid compliance and data access costs for the non-Open Finance firm.For example,an auditing firm that accesses PSD2 data might

181、be interested in also accessing FIDA data to provide some of its services.10 Should they get a FISP authorisation,or can they use the FISP-as-a-Service business model to get the data they want without the hassle of being regulated and supervised under FIDA?We think that regardless of the outcome,leg

182、al clarity must be ensured,and hence,customer protection as well.27THE PAYPERS|OPen FInance RePORT 2024Discussion point 5:financial exclusion concernsSome Member States have been increasingly concerned about the consequences of Open Finance data access on customers,especially the risk of financial e

183、xclusion and customer profiling.11 For example,a bank could give a certain credit score and automatically decline credit to people with a lower income.Therefore,suggestions have been made to exclude data on climate and natural disasters and limit the accessibility to customer data not older than fiv

184、e years.Counterarguments mention that climate and natural disasters are valuable data for insurers of such events for accurate pricing,and the five-year-old limit cannot be a one-size-fits-all approach as some data are inherently more long-term.One example is mortgage data.The FIDA Proposal also con

185、tains several financial exclusion safeguards to be respected by data users.Data perimeters and powers on the European Supervisory Authorities to draft standards on how FIDA data can or cannot be used to safeguard customer protection are among them(Article 7).Looking at the broader EU legislation,con

186、sumer profiling is regulated by the General Data Protection Regulation(GDPR)in Article 22,which will be fully applicable to the future Open Finance ecosystem.12 However,the GDPR applies only to natural persons,so customer profiling remains an unaddressed risk for legal persons such as small and medi

187、um enterprises(SMEs)unless these are so closely related to their owner that profiling these SMEs in practice means profiling the owner himself.In this sense,there is merit in the FIDA Proposal to include safeguards to prevent profiling of such vulnerable categories of customers but also maintain the

188、 balance to facilitate innovation and competition.Discussion point 6:occupational pension dataa second debated issue is whether to partly exclude occupational pension data.13 This is a hot topic for several reasons.Those who support its exclusion argue similarly to why life,health,and sickness insur

189、ance are excluded from the FIDA scope.Occupational pension data,especially when it concerns the payout of disability pensions,reveals information about ones health and,therefore,would endanger financial exclusion,and discrimination and diminish the risk-sharing principle of insurance as this data wo

190、uld be an indirect method for insurance firms to provide life,health,and sickness insurance.14 The second reason for exclusion is that customers do not choose the provider or its features as that is decided by the employer.15 Therefore,since customers(employees)cannot switch to another occupational

191、pension provider,there is a lack of added value,and Open Finance access would not really contribute to more competitive alternatives.28THE PAYPERS|OPen FInance RePORT 2024However,on the other hand,the European Insurance and Occupational Pensions Authority(EIOPA)is responsible for developing draft re

192、gulatory technical standards(per the latest draft version voted in the ECON)16 to prevent the misuse of FIDA data in the pricing of life and health insurance.Additionally,although the employee cannot switch the occupational pension provider,occupational pension data holds a lot of information about

193、the customer that can be used to offer other products,such as investment advice.Information about ones salary and potential retirement income could be very helpful when evaluating a persons financial situation.Therefore,this data remains a valuable source of information that,if excluded,would inhibi

194、t the benefits that FIDA data access promises to bring.conclusionDespite different viewpoints on the modalities of EU Open Finance,there seems to be no discussion challenging the underlying idea:financial institutions making their customer data available based on customer permission.It is safe to sa

195、y that it is a matter of time before Open Finance is implemented in the EU internal market.Starting from the moment of adoption(expected around Q3 or Q4 2025),market players have 30-32 months to implement Open Finance.In light of this,they should be mindful of the degree of standardisation and digit

196、isation of their customer data as determinants of the FIDA implementation costs.It is clear that all financial players,especially insurance providers,must pay attention to the financial exclusion safeguards,and bigtechs can always enter the financial services market through private contracts with fi

197、nancial institutions.What remains unclear is if data users can access FIDA data outside schemes and,if that is the case,whether they should pay for it and whether a market player can access customer data without authorisation through another authorised data user.29THE PAYPERS|OPen FInance RePORT 202

198、41 European Commission,Proposal for a Regulation of the European Parliament and of the Council on a framework for Financial Data Access and amending Regulations(EU)No 1093/2010,(EU)No 1094/2010,(EU)No 1095/2010 and(EU)2022/2554(COM(2023)360 final 2023/0205(COD),28 June 2023)accessed 27 September 202

199、4.2 As of writing,the proposal is waiting for a vote in the European Parliament after obtaining the vote in the responsible committee(Committee on Economic and Monetary Affairs(ECON Committee)accessed 27 September 2024.Several meetings have taken place in the Council of Ministers as well.See for the

200、 Councils approach(January-June 2024),Council of the EU,Proposal for a Regulation of the European Parliament and of the Council on a framework for Financial Data Access and amending Regulations(EU)No 1093/2010,(EU)No 1094/2010,(EU)No 1095/2010 and(EU)2022/2554-Progress report(10949/24,14 June 2024)a

201、ccessed 27 September 2024.3 Ibid in the Councils Progress Report.4 The designated gatekeepers are Alphabet Inc.(Google),A Inc.,Apple Inc.,ByteDance Ltd.(TikTok),Meta Platforms,Inc.(Byte)(Facebook),Microsoft Corporation Inc.and Booking,at European Commission,Digital Markets Act(DMA):Gatekeepers acces

202、sed 27 September 2024.5 Regulation(EU)2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives(EU)2019/1937 and(EU)2020/1828(Digital Markets Act)OJ L 265/1,12.10.2022.6 Eugerta Mui,The EU Open Finance P

203、roposal:Opening the Gates to Financial Services Data(Oxford Business Law Blog,15 December 2023)accessed 27 September 2024.7 Article 3(6a)FIDA Proposal financial information service means the online service provided by a data user of collecting and consolidating customer data to customers and does no

204、t include the provision of services regulated under existing Union financial services legislation and reserved for financial institutions authorised under Union law.8 European Banking Authority,Opinion of the European Banking Authority on its technical advice on the review of Directive(EU)2015/2366

205、on payment services in the internal market(PSD2)(EBA/Op/2022/06,23 June 2022)accessed 27 September 2024.9 Article 3(21)PSR account information service means an online service of collecting,either directly or through a technical service provider,and consolidating information held on one or more payme

206、nt accounts of a payment service user with one or several account servicing payment service providers at European Commission,Proposal for a Regulation of the European Parliament and of the Council on payment services in the internal market and amending Regulation(EU)No 1093/2010(COM(2023)367 final 2

207、023/0210(COD),28 June 2023)accessed 27 September 2024.10 Thomson Reuters,Open Banking at accessed 27 September 2024.11 French Delegation to the Council of the European Union,French Non-Paper,FIDA:How to Tackle the Risk of De-Mutualization(WK 6757/2024 ADD 1,8 May 2024)accessed 27 September 2024.12 R

208、egulation(EU)2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data,and repealing Directive 95/46/EC(General Data Protection Regulation)OJ L 119/1 04.05.2016 acc

209、essed 27 September 2024.13 Ibid.14 PensionsEurope,PensionsEurope Position Paper on the European Commissions Proposal for a Framework for Financial Data Access(Position Paper,October 2023)accessed 27 September 2024.15 Federatie,Dutch Pension Funds:How to Make Pension Fund Members and Beneficiaries Be

210、nefit from the Financial Data Access Regulation(Position Paper,25 September 2023)accessed 27 September 2024.16 accessed 27 September 2024.Trends and Players Shaping the Payments IndustryOpen Banking and Open Finance:Regional Perspectives31THE PAYPERS|OPen FInance RePORT 2024Gathering Pace:the Curren

211、t State of Open Banking Payment Adoption in the UKAndy is Chief Product Officer at GoCardless,responsible for driving forward the organisations global product and feature innovations.GoCardless is a global bank payment company which processes more than USD 130 billion annually across 30+countries;he

212、lping customers collect recurring and one-off payments without the stress or expensive fees.AndyWiggan Chief Product Officer GoCardlessSince 2018,many countries have looked to the UK and followed its lead in implementing Open Banking payments,adapting the UKs model to local needs and expanding it in

213、to new areas.However,if the UK wishes to remain the vanguard of Open Banking,it needs to start thinking further ahead into the future.Gocardless recently collaboratedwith11:FStoundertakenewresearch,combining survey results from 999 business decision-makers with qualitative research,to better underst

214、and which use cases and their associated sectors are quietly leading the way already,which are poised to benefit from Open Banking in the near future,and which still have a long way to go due to existing barriers.High-value remote transactionsOpen Banking payments are particularly advantageous for r

215、emote,high-value transactions;think of sectors like financial services and real estate.These customers value trust and security,which make Open Banking payments attractive for several reasons:1.Reduce the risk of card not present fraud since payments require upfront authentication;2.Payment is still

216、 simple and seamless;3.They eliminate burdensome interchange fees which typically range from 1.5-3.5%,but in some cases can be as high as 6%.Open Banking also means payers avoid the risks associated with manual entry of payment details as the system automatically populates account information and en

217、sures funds are sent securely.This reduces the anxiety of large payments getting misdirected,which our research found to be a common concern.MainchallengestodayThe main barrier to widespread adoption is that payment limits vary across banks.Theres also low consumer awareness compared to alternative

218、payment methods and if they arent requesting it,merchants have less of an incentive to use it.Recurring payments and subscriptionsAnother major use case for Open Banking is recurring payments and subscriptions,specifically in sectors like financial services,media,utilities,and SaaS(Software-as-a-Ser

219、vice).1.Merchants and their customers place value on being able to control how and when payments are made.2.Bank accounts dont expire.3.Providers,like GoCardless,enable the first payment to be taken alongside either a recurring Open Banking payment or direct debit within one seamless setup process.G

220、oCardless32THE PAYPERS|OPen FInance RePORT 2024MainchallengestodayCurrently,Variable Recurring Payments(VRPs)are mandated to sweeping use cases so their availability is limited to instances where two accounts are owned by the same person.This is great for building savings or paying off debt earlier.

221、Wider commercial use cases are on the roadmap to be unlocked,and its expected that additional industries like telecoms,utilities,government,and charity will be approved by the regulator in 2025.Success will continue to depend on ensuring banks are properly incentivised and that consumers are protect

222、ed.Remote,low-value transactionsLow-value,remote transactions are typically aligned with retail ecommerce,where the customer is looking to make an impulsive or low-consideration purchase.The customers want an experience thats simple and safe,requiring minimal effort on their part.Merchants prioritis

223、e speed and conversion to avoid payers abandoning the checkout as quickly as they entered.1.OneinthreeBritishpayers believe bank payments are the safest way to pay;2.Upfront authentication reduces the risk of fraud;3.Payments can be made on mobile or on-the-go.MainchallengestodayTo meet the needs of

224、 impulse shoppers,the wider ecosystem will need to better define and roll out consistent processes so that payers know what to expect regardless of the bank account or the apps they use.For example,to incentivise shoppers to switch away from cards,the ability to save bank account details on their ph

225、ones would be huge.In-person,low-value transactionsMuch like remote transactions,in-person transactions with low price points in sectors like hospitality and retail have been slow to adopt Open Banking.1.Instant one-off Open Banking payments can be made on mobile;2.Fast confirmation and funds leavin

226、g the bank account are critical benefits for point-of-sale;3.Ease of combining Pay by Bank URLs behind QR codes.The growing possibility of NFC-enabled Pay by Bank solutions and QR code-based payments could bridge the gap in in-person environments.Weve already seen that in action through GoCardless c

227、ustomers such as GravityActiveEntertainment who use QR codes in their trampoline parks for instant entry fees.But currently,theyre the exception and not the rule.For wider adoption in these sectors,Open Banking needs to integrate with existing POS systems to match the convenience and speed of contac

228、tless payments.PacingprogressIn the coming years,Open Banking payments will unlock significant benefits for use cases that involve high-value transactions,recurring payments,and sectors where security and cost savings are critical.Progress across use cases wont happen at an equal pace,but it is movi

229、ng and can move faster still if the payments ecosystem keeps working together.Click here for the company profile33THE PAYPERS|OPen FInance RePORT 2024Open Banking in the US Recent Developments and Key PlayersVlad is a Senior Editor at The Paypers,working on the Banking&Fintech team.He uses his resea

230、rch,content,and people skills for all activities revolving around Open Banking and Open Finance.Vlad has a degree in Biology and Molecular Genetics and an extensive background in creative writing.You can reach out to him on LinkedIn or email.Vlad Macovei Senior Editor The PaypersIm positive that any

231、one who reads this has had their LinkedIn wall bombarded with posts regarding CFPBs(finally)finalisingtheruleforpersonalfinancialdatarights.Steve Boms was recently kind enough toexplaintheeffectsofthisrulefortheUSmarket.Lets dive deeper into this geography to understand exactly who are the main play

232、ers that stand to benefit from this rule,outside of the end consumer.The Dodd-Frank Act:the emergence of Open Banking services in the USBack in 2010,as a response to irresponsible behaviour from the financial industry that led to the 2008 financial crisis,the US Government passed the Dodd-Frank Act

233、to improve consumers financial safety.In the context of Open Banking,two things stood out.First,the creation of the Consumer Financial Protection Bureau,and second,section1033oftheact.The latter specified that a consumer financial services provider must make available to a consumer information in th

234、e control or possession of the provider concerning the consumer financial product or service that the consumer obtained from the provider.The transition to the CFPB final ruleIn October 2020,the ConsumerFinancialProtectionBureausubmittedaproposalforarule-makingeffortrelatedtosection1033oftheDodd-Fra

235、nkAct,the first sign of support for the notion of Open Banking.In July 2021,as part of theWhiteHousesexecutiveorderregardingcompetitivenessandanti-monopolybehaviour,there was a firm statement that people should have a right to move their financial data from one organisation to another,a right to the

236、ir transactions and that enabling those rights should not be a complicated process.In October 2023,the CFPBofficiallyreleasedaproposedPersonalFinancialDataRightsrule,explicitly aimed at accelerating the shift to Open Banking.One year later,theruleisfinalised,and the general thought is that it will g

237、ive US consumers optimised rights,privacy,and security over their personal financial data.From market-driven Open Banking to regulationThe final rule is considered a game-changer.Up until this point,the US has already seen market-driven Open Banking,meaning that fintechs could provide Open Banking-p

238、owered solutions to US customers via the aforementioned section 1033 of the Dodd-Frank Act.However,the new regulation seeks to level the playing field for all consumers,regardless of which bank they use.The Paypers34THE PAYPERS|OPen FInance RePORT 2024According to Steve Boms,in payments,for example,

239、the rule can greatly expand access to Pay by Bank options,which offer lower transaction fees than credit or debit cards savings that ultimately benefit consumers.It also broadens access to affordable credit by enabling cash flow-based underwriting.The US consumer can now give specific consent for da

240、ta usage by specific third parties,while the rule strictly prohibits secondary uses outside of improving the solution covered by the initial consent.When the consumer does not renew their consent(after 12 months),the third parties must stop data collection and delete all data that was previously aut

241、horised.Hurdles for Open Banking in the USWhile for the fintech world and the end consumer,the final rule was welcomed with applause,not the same could be said for the traditional players.For example,less than 12 hours after the final rule was announced and posted by the CFPB,theBankPolicyInstitutea

242、ndKentuckyBankersAssociationreviewedthe600-pageruleandfiledalawsuit against cFPB for jeopardising customers privacy and account security with its new rule.This indicates that not all financial players are on board with the new rule.Also,back in 2016,Donald Trump pledged to repeal the Dodd-Frank and

243、the US Congress followed suit and passed the Economic Growth,Regulatory Relief,and Consumer Protection Act which acted as a counter-measure for important sections of the Dodd-Frank Act.Then,in 2018,then-President Biden and the CFPB started to rescind rules from the Trump administration.Now,with Trum

244、p being elected again as President of the US,the CFPB pushes to have the new rule approved before the new administration takes office and sends efforts back if the past is any indicator.Key players in US Open BankingAs mentioned before,even if the rule mandating Open Banking has been only very recen

245、tly finalised,the US had a very strong fintech presence already.Several players are responsible for driving innovation and infrastructure and here are just some of them:Plaid:uses data aggregation to connect consumer accounts to fintech apps and financial institutions.It allows users to securely sha

246、re their bank account information with services like Venmo,Robinhood,and other fintech apps.Plaid is widely recognised for its pioneering role in Open Banking infrastructure,providing API tools and secure access to financial data across the US.MX:specialising in data aggregation,data enhancement,and

247、 financial management tools,it offers API-driven solutions that allow banks and credit unions to provide customers with clearer,actionable insights.Known for its user-centric data solutions,MX aims to empower institutions to improve customer engagement by making financial data more understandable an

248、d actionable.Yodlee:owned by Envestnet,Yodlee is one of the oldest data aggregators in Open Banking,providing API connections to access financial data.It supports a broad range of financial institutions,with a long-standing focus on privacy and security.Yodlee was one of the first to create consumer

249、-permissioned data solutions,making it foundational in the development of Open Banking in the US.Finicity(ownedbyMastercard):acquired by Mastercard,the company offers data aggregation services with a focus on secure access to financial information for lending and personal finance.It supports connect

250、ivity for mortgage and credit approval processes.Finicitys connections help make credit decisions more efficient,improving loan accessibility and affordability for consumers.Akoya:a centralised platform for Open Banking and created by The Clearing House and major US banks.It provides a secure API-ba

251、sed system that allows consumers to share financial data without sharing passwords.Akoya has a unique position as its backed by banks and aims to increase security and control in data-sharing,acting as an intermediary between banks and third-party apps.35THE PAYPERS|OPen FInance RePORT 2024Flinks:pr

252、ovides data aggregation and analytics with a strong focus on the US and Canadian markets.It offers data solutions for credit risk analysis,lending,and other financial insights.With a specialised focus on data enrichment,Flinks enables financial institutions to derive insights and assess creditworthi

253、ness through comprehensive financial data.Fiserv:a global fintech company that provides a wide range of payment and financial services to banks,merchants,and fintechs.Their solutions include payments,processing,and data management.With a strong presence across banks,credit unions,and merchants,Fiser

254、v plays a critical role in bridging legacy banking systems with modern Open Banking solutions.Their infrastructure powers many behind-the-scenes processes for fintech applications.LinkMoney:a recent entrant focused on enabling direct bank payments in the US by leveraging Open Banking principles.They

255、 allow merchants to accept payments directly from consumers bank accounts,bypassing traditional card networks.Link Money stands out as a key innovator in US Open Banking payments,providing a viable alternative to traditional card-based payment systems.Their emphasis on security and cost-effectivenes

256、s aligns with the growing demand for Open Banking-based payment solutions.Trustly:enables US consumers to pay directly from their bank accounts without using cards,offering an alternative payment method for online transactions.Trustly caters to the growing demand for secure,low-cost payment options,

257、especially as merchants seek to lower transaction fees and improve cash flow.TrueLayer:although based in the UK,has expanded to the US to provide Open Banking and data-sharing solutions with a focus on payments and identity verification.Known for its experience in the European Open Banking sector,Tr

258、ueLayer brings expertise in compliant API management and secure consumer data-sharing,helping shape the US Open Banking landscape.conclusionFor years we have heard that Open Banking regulation is coming to the US.This year we could finally witness it happening,following the final rule released by th

259、e CFPB.The region has a strong fintech presence and ample collaboration between players to make consumers financial lives better,increase competition between players,open new revenue pools,and pave the way for Open Finance.36THE PAYPERS|OPen FInance RePORT 2024As Head of Global Open Banking at BBVA,

260、Carmela Gmez Castelao is leading the implementation and practice of Open Banking and Open Finance in the group.BBVA is a global financial services group with a customer-centric vision.It is present in more than 25 countries with strong positions in Spain,Mexico,South America,and Turkey.CarmelaGmezCa

261、stelao Head of Global Open Banking BBVAHow is the current landscape of Open Banking(OB)and Open Finance(OF)adoption across Latin America,and what role does BBVA play in advancing these initiatives in the region?Latin Americas Open Banking landscape varies greatly by country,with most of them develop

262、ing frameworks some via regulation like Brazil,while others,like Argentina,take a market-driven approach.This heterogeneity translates into the service offering.In each country,one or two incumbents lead with strong OB offerings but the fintechs are those who generally provide a wider range of servi

263、ces.Many companies are looking to embed financial services into their journey for different reasons,as they advance with digitisation and need to include payments,collections,or financing options in their customer offerings.BBVA aspires to be acknowledged in the region as one of the main contributor

264、s behind the development of OB and OF.We have been exchanging insights and information with regulators across multiple nations,and we welcome the entry of new participants who will add value and enhance customer service.What are the main challenges LATAM markets face in implementing OB and OF framew

265、orks,and how can these be overcome to accelerate progress?Every LATAM country is following a similar path for implementing the OB and OF frameworks although at different velocities,and therefore facing the same challenges:Defining how the participants can access the OB schema and how the trust frame

266、work will be implemented centralised or decentralised so that the right to participate and the requirements to comply with can be decided before participating.This is critical for the financial services provider that has the regulatory burden,to understand who can access the schema and which control

267、s are needed to establish a relationship.Its also important to define who will be affected by the regulation:those offering financial services or those embedding those financial services into non-financial journeys.Customers increasingly demand invisible finance,so regulators should facilitate acces

268、s to financial services from non-financial journeys,boosting innovation and convenience.BBVACarmelaGmezCastelao,HeadofGlobalOpenBankingatBBVA,discussesOpenBankingandOpenFinanceadoptioninLATAM,regulatorytrends,andBBVAsroleinadvancinginnovation.BBVA aims to be a key contributor in developing Open Bank

269、ing and Open Finance across Latin America,collaborating with regulators and new players.37THE PAYPERS|OPen FInance RePORT 2024The main challenge for OF is defining which data should be available,which kind of consent is needed from the data subject(customer),and which standards should be followed to

270、 share banking and non-banking data.How does BBVA collaborate with fintechs and other financial institutions to drive innovation through Open Finance?We envision a threefold collaboration world.1.Fintechs:BBVA collaborates with fintechs through our Spark area to bring innovation to the bank while he

271、lping them through investments(as of October 2024,BBVA Spark has over 1,500 clients and has generated over EUR 500 million in credit).2.Otherinstitutions,includingregulators,bankassociations,etc.:we try to get regulatory certainty and establish the balance between innovation and security for custome

272、rs in the performance of their financial transactions.3.Non-financialpartners:at BBVA,we understand that OFs value arises when we enrich the end-customer journey at our partners web or app.The best way to enrich this customer journey is to co-create it with the partner and learn about its pain point

273、s and how financial services could help overcome these challenges.Leveraging partners customer trust could be key to attracting new cohorts while providing value to the partners in their own journeys and bringing new clients to the bank.As for our most important lesson learned,it would be that truly

274、 innovative products and services come from mixing the banks expertise with the partners pain points to improve the customers experience.Looking ahead,what key trends or developments do you anticipate in the Open Finance space,and how will financial institutions leverage these to improve the financi

275、al services ecosystem in LATAM?We like to look at the scene from 3 points of view:change in customer behaviour,technological capabilities,and regulation.Customers will increase the use of convenient services embedded in their everyday lives,and those services,in many cases for niches of clients,will

276、 be provided by fintechs.This will require a close approach from regulators to clarify who will be an authorised player and for which types of services.In LATAM,with a considerable unbanked population,accelerating digitisation could be a key element to promote financial education and economic growth

277、.Technology allows the creation of startups offering financial services without the burden of regulation,where clarification of responsibilities is key.Last but not least,new participants will come to the Open Finance and Open Data world,and here standards and regulations around how we will intercha

278、nge those data with which type of customer consent will again be a key point to create regulatory uncertainty and,if wisely devised,foster innovation and Embedded Finance.Financial institutions should participate and invest in the ecosystem as the landscape for the next decade will probably require

279、collaboration with those owning the customer journey to offer the service where,when,and how the customer needs while keeping the customer data safe.Technological capabilities and regulation will shape the future of Open Finance,fostering innovation and embedded financial services.Trends and Players

280、 Shaping the Payments IndustryOperational Challenges and Opportunities in Open Banking39THE PAYPERS|OPen FInance RePORT 2024Ferdinand Dabitz is the CEO of Ivy,a leading Open Banking provider backed by Valar and Creandum,transforming global payments with a single API connecting 5,000+banks.Ivy elimin

281、ates the need for credit cards,reduces payment failures,and improves user experience,positioning itself at the forefront of enterprise payments.FerdinandDabitz Co-Founder and CEO IvyCan you explain how you eliminate the need for credit cards and ensure successful bank-to-bank transactions with Ivys

282、core technology?Traditional payment methods like credit cards and digital wallets are often costly and inefficient for merchants and consumers.These fees quickly eat into margins,especially for merchants with high transaction volumes or low-margin products.In addition,chargebacks and fraudulent tran

283、sactions create further operational burdens,often requiring additional resources to manage disputes and recover funds.For consumers,especially in regions like Eastern Europe,credit card ownership remains low,with only 37%ofadultsowningone.This limits access to credit-based payments,making bank-based

284、 alternatives more attractive.Instant bank payments provide a more secure and cost-effective alternative by cutting out intermediaries and enabling consumers to pay directly from their bank accounts.However,the European Open Banking landscape is highly fragmented,with over 5,000 banks and 24 differe

285、nt payment rails,leading to varying coverage and conversion rates between providers.At Ivy,weve built a network of networks to address this.We identify,contract,and integrate top-tier connectivity providers for every bank into a single API.This significantly improves coverage and conversion rates ac

286、ross markets.Our Smart Routing Engine further improves this by selecting the most reliable provider out of our network for each transaction,ensuring higher conversion and success rates.How does Ivy handle recurring payments?Our recurring payments product enables merchants to reduce recurring payment

287、 costs.One of the key challenges weve consistently heard from merchants is payment failure due to manual errors,insufficient funds,or IBAN fraud,which can lead to higher chargeback rates and lost revenue.To address this,we leveraged Open Banking to automate the setup of direct debit mandates for sub

288、scription payments and one-click payments.Open Banking with SEPA Direct Debit verifies accounts before creating mandates.It also means that users do not have to manually type their IBAN,improving user experience and eliminating the risk of false data entry.To further enhance recurring payment automa

289、tion,we introduced smart retries,which automatically reattempts debits when sufficient funds become available after an initial failure.This simplifies the management of recurring payments and mandates and significantly reduces the likelihood of payment failure,ensuring a more seamless payment experi

290、ence for merchants and their customers.IvyFerdinandDabitz,CEOofIvy,discussestheOpenBankingevolution,seamlesspaymentexperiences,andthegrowingdemandforreal-timetransactions.40THE PAYPERS|OPen FInance RePORT 2024How does Ivy leverage Open Banking to upgrade the user experience and streamline bank-to-ba

291、nk payments across different regions?In regions with low credit card penetration,such as Eastern Europe(where only about a third of adults own a credit card),Open Banking provides an excellent alternative,enabling users to make payments without friction.Additionally,with SOFORT merging into Klarnas

292、Pay Now offering,which will soon require users to create a Klarna account,and Giropay/Paydirekt being phased out,Open Banking offers a trusted and streamlined way for users to continue making bank payments seamlessly.However,as banks control part of the user experience,merchants sometimes express co

293、ncerns about friction in individual bank flows,especially since not all banks support one-click or biometric authentication.While this is true,the critical component is that consumers use their trusted banking app,which provides a familiar experience even for first-time users reducing perceived fric

294、tion.At Ivy,user experience and adoption are critical focus areas.The most trusted financial institution in 2024 remains the house bank,so we offer Ivy as a fully white-labelled solution with bank co-branding,displaying bank logos at the checkout instead of Ivys brand.Moreover,weve launched the Reme

295、mber me feature,which improves repeat payments by tokenizing bank accounts,allowing consumers to access their saved payment details across devices,merchants,and markets.This streamlines repeat payments,boosting user experience and conversion rates.How do you see Open Banking evolving in the next few

296、 years?We expect 63.8 million European users to adopt Open Banking in 2024.While Europe has led the way with PSD2,the upcoming PSD3 will further upgrade the ecosystem by standardising processes and tightening security.Open Banking has already become a global phenomenon,with over 70 geographies rolli

297、ng out local Open Banking infrastructures.At Ivy,we believe that seamless payments will soon be the baseline expectation for merchants and consumers.With all European banks required to implement SEPA Instant payments in 2025,the speed and efficiency of transactions will increase dramatically.Additio

298、nally,the growing demand for multi-currency payments and real-time cross-border transactions will continue to grow as businesses expand globally.Were developing solutions to meet these needs,helping companies scale internationally without the complexities of fragmented payment systems.As Open Bankin

299、g reshapes the payments landscape,were leading the charge.Were consistently innovating to ensure our solutions meet the evolving demands of merchants and consumers.Open Banking is the future of payments,and Ivy is here to help merchants thrive in this new landscape.Instant bank payments provide a se

300、amless,secure,and cost-effective alternative by enabling consumers to pay directly from their bank accounts.Click here for the company profileOpen Banking enhances SEPA Direct Debits by automating mandate creation,reducing errors,and streamlining the user experience.41THE PAYPERS|OPen FInance RePORT

301、 2024With experience across a variety of digital sectors including payments,electronic money,media,and telecommunications,Nikogiannis Karantzis is the Managing Director and CEO of ISX Financial,a banktech company servicing merchants across the EEA and the UK.Its offering includes end-to-end transact

302、ional banking,A2A payments,FX,remittance,and payment processing capability.NikogiannisKarantzis Managing Director and CEO ISX FinancialPlease share a bit about ISX Financials story and unique selling points.ISX Financial is incorporated in Cyprus and operates as a public company.We established ourse

303、lves in 2015 and have secured licenses in both the UK and the EEA through the Central Bank of Cyprus.Were as much a technology company as a regulated services firm.Developing our own technology allows us to deliver a high-quality service directly to customers without relying on third parties.ISX sta

304、nds out because we consider ourselves a tier-one player with direct access to central banks.Operating our own technology stack lets us create tailored products independently,which means if a customer comes to us seeking a solution,were often able to offer it or customise an existing product on our r

305、oadmap.This flexibility is unique and highly beneficial.Currently,our flagship product focuses on Open Banking,specifically our PaidBy solution.This product streamlines the entire process,from checkout through to transmission and settlement,allowing merchants access to their funds in approximately 1

306、5 seconds.Its a notable improvement over the traditional card settlement timelines,and we provide API-based notifications for instant cash flow.What is your view on account-to-account payments,and how can they be an alternative to cards?Historically,card schemes were the go-to for businesses seeking

307、 to accept payments online or across different currencies.These schemes allowed for cross-currency settlement and provided the infrastructure for transactions between banks.Today,account-to-account payments offer a competitive alternative,and our PaidBy solution replicates many of the benefits card

308、schemes provide,only with faster settlement times and lower processing costs.ISX FinancialNikogiannisKarantzis,CEOofISXFinancial,explainshowthecompanyreshapespaymentswithOpenBankingofferingsecure,cardlesstransactionsandinstantsettlementsformerchants.ISX Financial helps merchants with instant settlem

309、ent and full control through our Open Banking-driven PaidBy solution.42THE PAYPERS|OPen FInance RePORT 2024With PaidBy,any customer in the UK or Europe can make an Open Banking transaction directly on our platform.Settlement occurs almost immediately rather than the next day or longer as with card p

310、ayments.We also support foreign exchange(FX)between currencies,which enables transactions across borders,for instance,from a UK customer to a European merchant.This functionality is essential as we expand our network across regions,making transactions seamless for customers and merchants alike.Unlik

311、e other providers that only handle the push component of Open Banking,ISX Financial manages the entire transaction lifecycle.We handle transmission,settlement,and FX,effectively replicating the full-service card schemes offered but with increased flexibility and speed.By offering an alternative that

312、 matches or surpasses traditional card services,PaidBy provides businesses with faster,more effective cash flow.How does your company help merchants by leveraging Open Banking-powered payments?Open Banking,especially regulated Open Banking in the UK and Europe,is a transformative development.Unlike

313、card payments,which not all customers may have access to,every banked individual has a bank account that can leverage Open Banking.With PaidBy,customers can make payments online seamlessly through our platform,which is backed by the Open Banking-powered network.Open Banking is already impacting the

314、market significantly,and were seeing this in our financials,with revenues projected at EUR 55 million and EUR 18 million in net profits this year.Our competitors,such as TrueLayer,operate in a narrower ecosystem,resulting in lower revenues and profitability.By managing the entire process from checko

315、ut to settlement,and integrating FX capabilities we provide a complete solution that supports our strong growth.How do you see the world of Open Banking developing over the next 5 years?The next big step for Open Banking is point-of-sale(POS)integration.Were exploring several innovations for PaidBy

316、to extend into in-person payment situations,such as on-glass solutions that allow Open Banking transactions on mobile devices,and dedicated terminals that emulate card schemes.One option were considering is a mini scheme that uses host card emulation technology on Android devices to simulate a card

317、payment,while connecting to Open Banking rails instead of traditional card networks.This is technically feasible but presents some challenges.For instance,wed need to convince acquirers and terminal providers to add Open Banking as an alternative payment scheme.Some smaller schemes,like JCB and Dine

318、rs Club,have struggled with acceptance because of terminal compatibility and costs for merchants.To overcome these challenges,were exploring pairing Android or iOS devices with traditional terminals,as well as using over-the-air updates to integrate PaidBy into compatible terminals.Ultimately,moving

319、 away from physical cards and embracing Open Banking as a flexible solution will require industry-wide collaboration.Open Banking has the potential to bring new payment methods to the point of sale,reduce costs,and provide businesses with a more seamless,secure way to engage with customers.Were tran

320、sforming payments offering a faster,seamless alternative to card transactions with Open Banking.Click here for the company profileTrends and Players Shaping the Payments IndustryInnovative Solutions in the A2A Payments Landscape44THE PAYPERS|OPen FInance RePORT 2024Pay by Bank:Driving the Future of

321、Seamless and Secure PaymentsIan Morrin is Head of Payments&Platforms at Tink,A Visa Solution,a market-leading Open Banking platform serving some of the worlds largest financial institutions.Ian has a dual role of leading Tinks UK operations and being responsible for Tinks payments and platform busin

322、ess across 19 markets.Ian Morrin Head of Payments&Platforms Tink,A Visa SolutionPaybyBankisundoubtedlygainingmoreandmoretractionintheworldofpayments.Here,TinksIanMorrindiscusseswhatisdrivingtheadoptionofthisOpenBankingsolutionthatprovidesafast,low-cost,andmoresecuremethodforaccount-to-accountpayment

323、s(A2A).The quest for reliable,secure,and user-friendly payment methods is relentless.If youre an ecommerce business or payment service provider(PSP),youre likely familiar with this pursuit.As a merchant,you might be experiencing payment method fatigue trying to stay on top of the variety of payment

324、methods on offer and may find it hard to determine which payment methods are worth the integration.What exactly is Pay by Bank?Pay by Bank is the now commonly used term for the account-to-account payment method that allows consumers to quickly transfer money directly from one bank account to another

325、 whether that be to a business,another consumer,or between their own personal accounts.Pay by Bank combines a modern,seamless user experience with industry-leading security and low costs.Once a consumer authenticates using Face ID,a fingerprint or a similar secure bank-level verification method,the

326、money moves between accounts instantly.With less data entry and fewer redirects,Pay by Bank provides a streamlined experience at low cost by letting consumers authenticate and initiate payments with a couple of clicks.Tink,A Visa Solution45THE PAYPERS|OPen FInance RePORT 2024Why is Pay by Bank gaini

327、ng traction in the payments industry?Many checkouts that consumers use these days are enabled by payment service providers(PSPs),two of the more well-known ones being Adyen and Stripe.These PSPs mostly go unnoticed by the consumer checking out,but for the businesses using them,they can provide vital

328、 infrastructure to allow their customers to check out smoothly.At their core,PSPs aim to enable merchants to process payments from the widest possible customer base,ensure transaction security,and simplify payment processing.But to thrive in the competitive payments industry,PSPs must also achieve m

329、ore fundamental goals such as growing revenue and increasing profitability.While many payment methods can help PSPs meet the first goal,not all can deliver on the second.Thats where Pay by Bank shines.It not only broadens their total base of end-users,but can also help them and their merchants with

330、a cost-effective payment method that can reduce fraud and losses.Driving adoptionAt Tink,we want account-to-account payments to become more prominent in digital commerce especially for one,it gives consumers more choice at the checkout,helping financial inclusion.However,ecommerce is arguably the ha

331、rdest segment in payments to serve because its where both merchants and consumers are the most demanding in terms of the experience they want to have.The interest from merchants and retailers is there though.At Tink,weve talked to so many and there is a healthy pipeline of companies that are adoptin

332、g Open Banking payments.Consumer adoption is a big focus now,as the next logical question we often hear is will people use this?And its great to be able to show that millions are already using Pay by Bank for things like bill payments and account top-ups and the user experience is seamlessly transfe

333、rable from one use case to another.For example,Tink is helping to enable Pay by Bank payments with a wide variety of partners,including TransferGo for international money transfers,Eventim for ticketing services,and Splitwise for bill splitting and expenses.With Splitwise in the UK,Pay by Bank is the primary payment method for settling bills between friends and family.Since launching in-app paymen