Mastercard will use open banking to expand beyond paymentsSep 2,...

Mastercard will use open banking to expand beyond payments
Sep 2, 2021

Mastercard sees itself as a central player in the open banking regime, and is using an acquisition in the United States to build data analytics services, including for loan assessment and invoice management, as it moves beyond its traditional focus on cards and payments.

Mastercard applied to the Australian Competition and Consumer Commission for accreditation to become a data recipient under the government’s consumer data right and is building integrations with banks to allow it to receive bank account data when customers consent.

The take-up of open banking, thefirst industry adoption of the consumer data right, has been slow, with only afew banks and fintechs accredited by the competition regulator. But the admission of Mastercard could help lift adoption, as it works on automating everyday business processes such as applying for a loan or shopping around fora better energy deal.

If accredited, it would join US data tech players Intuitand Yodlee as offshore participants in the CDR, which is a centrepiece of thegovernment’s competition policy. Mastercard paid $US825 million last year for UScompany Finicity, which builds application programming interfaces (APIs) that connect to banks to extract data. Finicity is preparing to enter Australia through Mastercard, which trades in New York with a market capitalisation of$US350 billion ($475 billion).

Mastercard plans to connect third-parties with its network to facilitate access to the CDR, so participants do not have to build the connections themselves.“Our plan is to bring our open banking services to Australia early next year,” said Richard Wormald, divisionpresident for Mastercard in Australasia. “We think we can help drive scale, and we can play a role strengthening the overall ecosystem.”

The move shows Mastercard is thinking more broadly than its credit and debit card network asthe domestic, real-time payment system known as the NPP [new payments platform]prepares to allow merchants to take payments directly from their customers’ bank accounts, under a function known as PayTo, from early next year.

You will see a coming together of the use of data to help consumers evaluate offers from different providers. — Richard Wormald, division president for Mastercard in Australasia

Mastercard is developing services that are agnostic to whichever payment rail is used and says its open banking offering will integrate with the NPP and PayTo. “We see a coming together over time of three pieces of technology: the open banking platform, digital identity as part of consent management flow, and account-to-account payments,” Mr Wormald said.


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