Nov 23, 2020: Open Banking Enabled Payments

Written by Gertjan De Wilde

Happy holidays! We hope you are safe and well during this challenging time. Thank you so much for your ongoing support! Please see below for your weekly update. As part of our passion to continue providing you with industry-leading information on the Open Banking Segment globally. This update will have the weekly additions to the Open Banking Tracker (Banks, APIs, TPPs, etc.), and an interesting new use cases for Open Banking!

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Our Current Coverage

  • We track 558 banks providing open banking services! (+7 from last week!)
  • 986 APIs currently tracked on our platform! (+5)
  • 380 TPPs in the ecosystem!
  • 81 Global markets covered!
  • 24 API Aggregators! (with more coming very soon...)
  • Track over 60+ data points for all openbanking projects!
  • And we are growing on a continuous basis... 🚀🚀🚀

Weekly Developments (Nov 23rd to Nov 30th):

We initiated coverage and provided OpenBanking information for:

  • ZEN.COM (Recently launched Belgian based shopping PFM Neobank!)
  • ING DiBA
  • Ziraat Katilim (Turkish Bank)
  • UnoBank (Southeast Asia’s first full-spectrum digital bank!)
  • Envel (US Based AI enabled bank!)
  • Ziglu (UK Based Crypto & Forex Bank)
  • Juni (Swedish Challenger Banks for E-Commerce)
  • GigWage (US Based Financial Infrastructure for the Gig Economy)
  • Biggest Publicly Available TPP Registry in the Industry! 🚀🚀🚀

Open Banking Use Case: Open Banking Enabled Payments

Prior to PSD2, when individuals wanted to make payments online, they would need to go use their debit or credit cards in most cases to process transactions. Post enablement of PSD2 and Openbanking, this is no longer the case, as the Payment Initiation Services (part of PSD2) provides customers with an alternative to credit or debit cards for online transactions. The PSD2 regulations help third-parties receive open access to payment accounts without compromising customer security.

PIS essentially allows users to pay directly from their bank account — meaning TPPs can process payments to anyone with an approved bank account. Instead of complicating the customer conversion process with account creation and asking for bank details, PIS offers seamless integration with a network of regulated banks

This has allowed players like PPRO, but also vendors like Unified Post to have direct payment capabilities, significantly disrupting the space. As individual businesses that process a lot of payments can start to become mini FinTech's by either building the functionality in house or working with cheaper and leaner payment initiation service providers (PISP)! This disruption is going to be big!


What is the general takeaway...

From the PSD2 directive we see two key benefits:

  • Online payments fees reduction: Expensive fees related to the online card-based transactions can be reduced significantly, since PISPs initiate a credit transfer to debit the customer’s account and credit the merchant’s account. Online credit transfers are cheaper than online card payments and will allow PISPs to generate revenues while at the same time reducing online card processing fees and costs for corporates

  • Faster cashing and better liquidity: Today, corporates generally collect cash two or more days after the online card transaction is initiated. By pushing the funds, PISPs can credit corporates’ accounts instantaneously (SEPA Credit Transfer Instant) or in one maximum one business day (SEPA Credit Transfer Classic). Cash flow can thus be improved.

But also see some drawbacks:

  • Security and reputational risk: Corporates must build and manage a new relationship to the PISP in a sensitive area—accounts receivable. Their information and reputation are at stake. If a PISP’s security is compromised, the reputation of all companies working with that PISP might be affected. So it is important to check the background of a PISP before engaging in the business relationship.

  • Dependency risk: If the PISP becomes unavailable for a length of time, this could lynchpin the businesses reputation and performance to a single provider. And we all saw what happened with Wirecard... Contingencies have to be in place and can be expensive!


Please feel free to email us back with any coverage or data requests to implement or improve our current data set! We are a customer centric provider and want to make sure our users are as satisfied as can be!

We also highly recommend you to follow our Twitter @BankingTracker for tracker updates, @BanqNetwork for FinTech news, and @Banq_ai for business updates! If you enjoy our newsletter, then please share it - either by forwarding to your contacts or sharing this link on social media.

Have a great week and stay safe!

The Banq team

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