Today’s payment service providers (PSPs) play a crucial role in facilitating global commerce for entrepreneurs, small- to mid-sized businesses (SMBs) and eCommerce marketplaces. One tool that more PSPs are adopting is open banking technology. When offered as a payment option for business-to-business (B2B) clients, open banking allows PSPs to provide firms with “plug and play” payment options that are simple to implement and compliant by nature.
In Open Banking: The User’s Guide for PSPs, a PYMNTS and TrueLayer collaboration, we present a comprehensive overview of how open banking is helping PSPs modernize their payments for a range of businesses around the globe. Open banking is experiencing exceptional growth in adoption worldwide, especially with PSPs as they seek to provide new payments alternatives for their clients. PSPs can harness the power of open banking in myriad ways, including as a plugin for mobile apps, platforms, and marketplaces. They can use open banking application programming interfaces (APIs) that allow their business clients to tailor payments options to their end customers’ specific needs.
Our research also shows that open banking helps PSPs provide the payments technology that companies need to expand into new regions abroad, especially when it comes to diverse, strong customer authentication (SCA) and know your business (KYB) regulations. PSPs are often tasked with supporting growing businesses confronting regional differences in the application of SCA and KYB standards in addition to facing complex, cross-border cards payments. This can lead to slower or even stalled payments for businesses when they make card-based transactions.
Open banking’s benefits do not stop there. PSPs can also offer the payment method to help their customers avoid the “false flags” that occur when legitimate transactions trigger alerts due to differing SCA and KYB standards. Open banking can also circumvent the high costs associated with a too-lax security protocol.
PSPs can likewise tap open banking for clients as an all-in-one payment solution, enabling businesses to instantly authenticate their clients or customers and enabling them to offer frictionless payment services through any platform, app or storefront — all within seconds rather than minutes or days.
These findings merely scratch the surface of how offering open banking solutions can help PSPs satisfy the needs of their customers and clients. For more details, download the report.