While the EU is home to many developed economies, there are still significant disparities in access to financial services across member states. In fact, a considerable portion of the population is facing barriers to such basic financial services as bank accounts, credit, and insurance. Fortunately, the current landscape is set to transform as the concept of open banking gains momentum.
Some of the latest advancements in this area are Mastercard’s launch of its Account Owner Verification solution and its strategic partnerships with fintech companies specializing in open banking solutions. This article explores these new developments and explains how they could help to unlock economic opportunities and drive financial empowerment for all.
Mastercard is one of the world’s largest payment technology companies, facilitating transactions between merchants, financial institutions, and consumers.
The industry giant recognizes the importance of collaboration in the payment space and actively engages with financial institutions, fintech companies, and developers to foster innovation. Here are some of its latest EU partnerships:
Now that you can see the big picture of Mastercard’s latest developments in the European payments sphere, it is time to explore the company’s advancements when it comes to open banking.
The payment company is continuously developing and releasing exciting solutions in this sphere, yet the two most impactful developments in recent times are as follows:
Account Owner Verification
Mastercard’s innovative Account Owner Verification is set to revolutionize how bank account ownership is confirmed in today’s increasingly digital world. This solution automates, strengthens, and streamlines the process by leveraging open banking principles.
Mastercard anticipates that this solution will have a broad impact across industries, addressing pain points related to account opening, payment credential addition, and direct debit origination.
It is also expected to benefit a wide range of industry players, including:
By leveraging Mastercard’s European open banking connectivity, businesses can achieve instant verification of bank account ownership. Additionally, the verification process provides a score, indicating the strength of the match between the submitted name for verification and the name held on record by the customer’s financial institution.
Overall, Mastercard’s Account Owner Verification service offers a game-changing solution that enhances the efficiency and reliability of bank account verification for businesses across industries, opening up new possibilities for secure and seamless transactions.
Partnership with Algoan
In addition to the new account verification solution, Mastercard has embarked on a new partnership with Algoan, a specialist in open banking credit decisioning based in France. This collaboration, announced on June 6, 2023, aims to drive financial inclusion in emerging EU markets, with an initial focus on the Western European region.
Algoan is renowned for providing a comprehensive suite of credit decisioning tools that leverage the power of open banking to support leading lenders. Through the partnership, Algoan will utilize Mastercard’s Open Banking connectivity to enhance its credit insights, credit score, payment score, and categorization features.
All in all, by combining the expertise of Mastercard and Algoan, this partnership aims to revolutionize credit decisioning processes and foster financial inclusivity, benefiting both lenders and borrowers.
Given Mastercard’s historical commitment to staying at the forefront of the industry, it’s reasonable to expect that the industry giant will continue to prioritize its efforts in open banking and payment innovation moving forward.
Industry experts agree that Mastercard may pursue further advancements in areas like contactless payments, mobile payments, biometric authentication, and tokenization to enhance transaction security, convenience, and speed. It may also invest in emerging technologies like blockchain or explore new payment methods to cater to evolving consumer needs and preferences.
In the context of open banking, Mastercard may focus on further expanding its partnerships and collaborations with FIs and prominent fintech companies. The company is also expected to continue developing and enhancing its API offerings.
Overall, Mastercard’s involvement in the European payments landscape reflects its commitment to driving digital transformation, fostering competition, and delivering innovative financial services to consumers and businesses. Due to this, Mastercard is forecast to continue playing a leading role in promoting financial inclusion and shaping the future of open banking in Europe.
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