Mastercard is betting big on open banking, working with leading players in the space—including Worldpay from FIS—to provide consumers and small businesses with the ability to authorize trusted entities access to their financial information.
Through its collaboration with Worldpay, consumers can facilitate direct bill payments from their bank accounts and authorize the sharing of their data—without it being stores—between trusted parties. Mastercard is also working with J.P. Morgan Payments on a pay-by-bank solution that leverages its open banking technology to simplify bill payments.
“Open banking solutions can speed up the lending process so consumers and SMEs are able to get quick access to funds they need and get back to running their businesses and completing purchases,” said Daniel Keyes, senior analyst at Javelin Strategy & Research. “It’s particularly important that SMEs and consumers are only given funds that they’re in a position to pay back, and open banking can help make sure underwriters have access to the financial information needed so neither ends up overextended.”
Trust is Fundamental
According to the company, trust is a vital component of open banking, and Mastercard is particularly keen on safeguarding consumer data.
“We’ve been in the data space for a very long time, so we have a very high bar on compliance, security, safety,” said Jess Turner, EVP, Head of Global Open Banking and API at Mastercard. “Even in the way we transmit things and how we use data, that’s a core focus of ours. And so we put a lot of energy into digital identification and into fraud reduction.”
“What we do with open banking is we embed those assets into the data flow,” she said. “When we talk about open banking, we talk about connecting to a bank’s APIs. And that is the most secure way to move data. When you bring these assets together, you have an ability to have consumer consented data with clear transparency for what they’re using it for.”
Tackling Fraud
Last year, consumers in the U.S. and Canada experienced $3.2 billion in losses from fraudulent opened accounts.
“That’s a lot from opening fraudulent accounts,” Turner said. “If that happens, and you’re a victim of that, you’re not going to try it again next time.”
“Consumers and small business own their data, and they should have access to it—and it needs to be protected. Everything we build around that is to support those policies and principles. We also believe that you should not be bias in the data, and it should be used in a clean and concise way,” she said. “That’s really important, because with that, we have boards across Mastercard that check all of the data products we have—whether it’s a new model, whether it’s an attribute to make sure we’re following our data principles and how it’s leveraged, and then to, to make sure there’s no bias in it. We take it very seriously.
