Mastercard’s Innovative Approach to Open Banking Explored at Money20/20 USA 2023

Money20/20 USA 2023 gathered the financial services industry’s brightest minds in Las Vegas, providing a platform for insights into the future of fintech. One notable figure at the event was Jess Turner, the Global Head of Open Banking & Payments for Mastercard, writes Louis Thompsett in Fintech Magazine. In an exclusive interview, Turner shed light on Mastercard’s pioneering efforts in Open Banking, both in Europe and the United States.

«Open banking started in Europe with PSD2,» explained Turner, referring to the regulatory framework introduced in 2018. PSD2 mandated that a specific amount of a bank’s customer data be made available to third parties. Since then, there has been a concerted effort to standardize the technology, making it scalable. However, the approach to Open Banking in Europe differs significantly from that in the United States, raising questions about whether the same scalability can be achieved on both sides of the Atlantic.

Turner clarified the distinctions, stating, «Open banking in the US is very different from Europe, where it is regulated; it is market-driven and a response to consumer demand. What we’ve been doing across both Europe and the US is working on best-in-class connectivity between the banks and third parties, always with consumer consent. This approach ensures that the data is of high quality, backed by best-in-class security and foundational compliance programs, enabling us to address various use cases. Even though one market is regulated (Europe) and the other is market-driven (US), solving the challenges of open banking ecosystems is remarkably similar.»

As Mastercard continues to foster connections between banks and third parties in the era of Open Banking, the company has taken a significant step forward by partnering with Worldpay. Turner expressed excitement about this new collaboration, saying, «We’re thrilled about our expanding partnership with Worldpay. With this extension, we leverage our Open Banking connectivity to link consumers, with their consent, to third parties via their bank accounts.»

Turner went on to explain the process: «When a consumer decides to connect their bank account for a payment, typically in the biller segment, they grant us consent. We then facilitate the connection to their bank account and develop products and services that enhance security, ultimately enabling consumers to make bill payments through Worldpay more seamlessly.»

Mastercard’s commitment to innovation in the Open Banking space is evident through its strategic partnerships and focus on data security and consumer consent.