Open banking : a financial innovation in payment methods
Open banking is based on a simple principle: with your consent, your financial data is shared securely via APIs to enable third parties (fintechs, merchants, insurance companies, SaaS publishers) to offer faster and less expensive services.
In Europe, the PSD2 directive started the movement by requiring banks to open up access to accounts to authorized service providers.
What is the speciality of open banking ?
Open banking creates a playing field where banks, fintechs and non-financial companies can design more seamless payment experiences. Open banking is based on the following specific features:
- “Pay by Bank” : the customer pays directly from their bank account, without a card. From the merchant’s website, they are redirected to their banking app. They authenticate themselves, validate the pre-filled transfer (amount, IBAN, description), then return to the website after confirmation. This method simplifies the user experience, enhances security and can reduce costs.
- Fairer and faster credit
Access (with consent) to income and expenditure histories enables real-time creditworthiness assessment (cash-flow underwriting). Supervisors recognize that these APIs are transforming the value chain and stimulating competition, while calling for rigorous risk management.
- A more open ecosystem
API, identity and security standards facilitate interoperability between banks and TPPs. This makes the market more contestable and conducive to new models (embedded finance, BaaS, lending-as-a-service).
Our added value at Huch
Enjoy instant settlements so the money arrives right away and your cash flow can breathe. Say goodbye to chargebacks and cut fraud, as customers confirm payment in their banking app without entering card numbers. Lower your fees with account-to-account rails that remove middlemen and lift your margins. Boost acceptance because authentication in a familiar, secure environment makes the journey smoother and reduces drop-offs. Expand across Europe with a single connection to over 2,000 banks, without piling up local contracts. Keep full control of your funds since Huch never holds them, from checkout to settlement. And get live fast with a unified API, ready-to-use SDKs, and clear docs so you can launch in hours without touching your existing stack.
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