Yesterday we identified an alternative network being built on the open banking rails. Now Kevi, a Lithuanian start-up has indicated that it will use the open banking infrastructure to intercept traditional card transactions even as the cardholder types in the card data. Its unclear if consumers will recognize that this eliminates the dispute process enabled by the major card rails:
“How it works, according to Mr Sokolovas, is that when customers start typing in their card number, the system can detect from the first eight digits whether it’s a credit or debit card and from which bank it is issued. If it’s a debit card, the system gives the customer the option to switch to an A2A payment.
And since PSD2 includes the provision that banks must institute safety checks for card transactions (Strong Customer Authentication, or SCA) consumers must confirm at bank side. Kevin’s method excludes the card scheme middlemen, offers savings to merchants, and doesn’t alter the user experience for the end consumer.
“It’s maybe not so magic, it’s very simple. But nobody was using this to compete with Visa or MasterCard. So yes, it’s simple, but very very powerful,” explains Mr Sokolovas.
Partners, not competitors
The objective for Kevin is not to build on top of the infrastructure of others, but to let others build on its infrastructure.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
