Leading Firms Collaborate with Mastercard to Further Secure Open Banking Ecosystem

Mastercard announces three key financial firms as the latest companies to start using Mastercard Open Banking Protect, safeguarding organisations who manage customer accounts against compromised or unauthorised third-party providers (TPPs).
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Aion, DiPocket and Modulr have all signed agreements to use the Protect solution, which is a key component of Mastercard’s Open Banking Solutions™ portfolio of market-leading applications and services to underpin, enable and safeguard the open banking ecosystem across Europe.

PSD2 legislation in Europe allows TPPs to access bank accounts, with a customer’s consent, to provide new products and services; however, the account holding institutions remain liable for the funds. It is therefore important for financial institutions quickly to verify open banking requests from TPPs, with whom they may have no prior relationship, and that robust systems are in place to detect warning signs of potential fraud early on.

Mastercard Open Banking Protect is designed to improve the ability to combat fraud in open banking and increase the confidence of financial institutions when approving third-party requests. It offers two key services:

  • Licence and certificate validations – swift verification of TPP certification and registration status against all relevant directories.
  • Fraud Monitoring – uses network-level data on a given TPP to spot trends and changes to regular activities through behaviour monitoring in order to stop potentially fraudulent requests.

The partners announced today include a wide range of use cases – from a digital bank powered by AI (Aion), to a wearable pre-paid tech provider (DiPocket), and the leading payments as a service alternative to wholesale and commercial transaction banking for businesses (Modulr).

All of these companies are collaborating with Mastercard through Open Banking Protect to enhance their ability to identify fraud in a new ecosystem and better protect their business and their customers against unauthorised third-party providers.

Jim Wadsworth, SVP, Open Banking, Mastercard comments: “While there is strong momentum in the open banking ecosystem, financial institutions, TPPs and users continue to be concerned about the potential for fraud and security breaches. Mastercard Open Banking Solutions™ draws upon our considerable expertise in operating and supporting global banking and payments systems to help ensure the open banking ecosystem works seamlessly with security at its core. We designed Protect to offer enhanced safety and security features for financial institutions and TPPs using open banking, including TPP verification and market-leading fraud monitoring.

“Collaboration is key to building a resilient open banking market, and we are delighted that Aion, DiPocket, and Modulr are the latest in a series of partnerships for Mastercard as we work to create an even safer system for all participants. This is a significant milestone for the wider ecosystem and opens the door to even greater adoption of open banking across Europe.”

Cyrus Wadia, Payments Strategy Director, Modulr comments: “In our bid to eliminate the hidden inefficiencies that have traditionally proved costly to UK businesses, we are pleased to work with Mastercard to supercharge our efficient, secure and accessible payment service, so our customers can make the most of open banking.”

Fedele Di Maggio, CEO, DiPocket comments: “Investing in fraud prevention now is incredibly important to ensure that we are safeguarding the open banking ecosystem for the benefit of our customers. Through Open Banking Protect, we are doing just that by providing a service that is not only low cost and transparent, but also secure and protected.”

Recent Mastercard research amongst European financial institutions confirmed that their number one concern is fraud risk and loss1 in the backdrop of a complicated marketplace where numerous regulators, 31 National Competent Authorities and up to 90 QTSPs are make verifying third parties a significant challenge for financial institutions2.

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