Community Discussion: What is Open Banking?

[apichard]

What are your thoughts on Open Banking and how it may shape consumers existing relationship with the current model?

[timhuckle]

You've asked this a couple of times with no response to date, so I'll weigh in having recently joined the Visa developer community. 

I work in financial services, we process tens of thousands of card transactions in the UK a year, typically high value, low risk transactions that enable a customer to fund their account. 

As an extreme, max value case, a £100,000 transaction costs around £28 on a debit card and I can expect to receive funds at best T+1. 

I can process a similar payment through OB for around 20 pence and receive the money in seconds.  I accept there's often additional user journey friction around OB payments but on a mobile particularly a payment can be completed reasonably simply and securely. 

I guess the question back is, how do Visa (and Mastercard) intend to compete, since I only see scheme and processing fees going up over the last few years.

[timhuckle]

I've since discovered this forum question is linked to an article describing exactly what Visa is doing in the OB space: https://usa.visa.com/partner-with-us/info-for-partners/open-banking.html
Looking forward to seeing this progress.

[apichard]

Thanks for the response Tim! The work our peers are doing at Tink is really incredible and I'm also quite excited to see how things develop in the space.  As you mentioned, it creates new opportunities for all of us to explore.

[AarifAkhter]

Open Banking is a way for banks and other financial companies to share your financial information securely with each other and with authorized apps. It helps you access better services, like budgeting tools and faster payments, and gives you more control over your money. You have to give permission before your data is shared, and it's protected to keep it safe.