Traditional banking institutions are very conservative and reluctant to open up to innovation. However, even they had to succumb under the pressure of digital technologies.
A new financial mechanism called open banking has arisen thanks to the introduction of open APIs that give access to customer bank accounts. Transferring payments using trusted Third Party Providers (TPPs) has become so fast and secure that many IT-savvy users have switched to using them. Other companies followed them, seeing the benefits and savings from using open banking payments.
What is an open business banking account that simplifies B2B and B2C interactions?
What Is the Essence of Open Banking
Third-Party Providers (TPPs) are financial organizations ready to provide fast and efficient payments. However, the main problem was in the access to bank customer accounts, which were reliably protected by the banking sector.
In 2015, according to EU directives, the situation changed, and the use of open APIs for the conduction of financial operations was allowed. Thanks to these technologies and legislative solutions, TPPs began to interact with users’ bank accounts with their consent and conduct financial transactions with their funds.
Who Can Benefit from Using Open Banking
Open banking is a technology that operates on the basis of the Application Programming Interface (API). This mechanism has the right to transfer information in a highly secure form from the bank accounts of clients to any third parties trusted by the bank’s clients. These can be marketplaces, IT companies, FinTech companies, information platforms, and many other market participants.
Any company that uses open APIs can make it easier for their customers to process payments through open banking.
Open Banking Solutions by Payment Gateway Fondy
Payment gateway service provider Fondy offers a variety of high-tech solutions that make it easier for companies to financially interact with their customers and partners. The introduction of open banking technologies with full technical support by Fondy is one of the numerous financial services the company offers to its clients. The demand for this type of service has especially intensified since 2020 due to the pandemic.
Fast, cheap, and reliable open banking payments have shown many benefits:
- Providing payments security;
- Eliminating middlemen and the fees they charge;
- Sending money transfers to a large number of clients or partners in one transaction;
- Taking into account consumer behavior through access to their financial data, and much more.
Switching to open banking technologies will allow you to reduce payment processing costs, increase conversion rates, make it easier to accept international payments, and much more.
To learn more about integrating open APIs into your business and transitioning to open banking technologies, contact the Fondy platform for detailed instructions and top-notch services.