Advancing Global Open Banking to Empower Choice and Instill Trust

Rhea-AI Summary

Mastercard is partnering with Worldpay from FIS and Zip to scale new open banking-powered solutions that enable more payment choice, empower consumer lending, and modernize account-based payments. Mastercard is using AI to protect payment transactions and is working with J.P. Morgan Payments and Worldpay to make recurring bill payments frictionless and secure. Through a partnership with Zip, Mastercard is enhancing the real-time underwriting process of Zip’s lending program. Mastercard is also expanding its open banking connectivity across the U.S., Australia, and Europe.

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• Mastercard is partnering with leading players to scale open banking-powered solutions, which could drive innovation and improve payment experiences. Mastercard's AI technology protects over 125 billion payment transactions annually, reducing the risk of fraud. The partnerships with J.P. Morgan Payments and Worldpay aim to make recurring bill payments frictionless and secure, potentially improving consumer satisfaction. The partnership with Zip enhances real-time underwriting for lending programs, making it easier for consumers to budget for larger purchases. Mastercard's expansion of open banking connectivity across multiple regions could lead to increased adoption of their solutions.

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Mastercard provides open banking technology to support leading partners across the ecosystem with safe, flexible and secure lending and payments experiences

PURCHASE, N.Y.--(BUSINESS WIRE)-- Mastercard is partnering with leading players across the ecosystem, including Worldpay from FIS, the merchant solutions business of global financial services technology provider FIS, and Zip, a buy now, pay later firm, to scale new open banking-powered solutions that enable more payment choice, empower consumer lending, and modernize account-based payments. Mastercard is bringing the promise of open banking to more consumers and small businesses, enabling them to permission the sharing of their financial data between trusted parties.

The promise of open banking cannot be realized without trust. As more people manage their finances online, the digital landscape is evolving to safeguard against account takeovers and synthetic identity fraud, which can lead to significant financial losses. In fact, consumers in the U.S. and Canada lost $3.2 billion from fraudulently opened accounts in 2022. To help, Mastercard is harnessing AI to protect more than 125 billion payment transactions every year, underpinned by its data responsibility principles: you own your data, you control it, you should benefit from the use of it and we protect it.

Easing the burden of online bill payments

As consumers look for more choice in how they pay – particularly for recurring payments – they also expect those payments to be frictionless and secure. To scale account-based payments, Mastercard is working with partners like J.P. Morgan Payments on its Pay-by-bank solution, which uses Mastercard’s open banking technology to take the pain out of recurring biller and merchant payments made via ACH – from rent and utilities to government and insurance payments.

To further scale and modernize payments, Mastercard is now partnering with Worldpay so consumers can permission their data to be shared (not stored) seamlessly between trusted parties and securely pay bills directly from their bank account. Mastercard’s open banking technology removes the friction associated with manually typing in routing and account numbers each time. It also automates consumer onboarding for billers and merchants and reduces the risks and costs of storing bank account information. In addition, Worldpay will tap into Mastercard’s account owner verification capabilities to support merchants in the onboarding process.

"We are delighted to partner with Mastercard to leverage their open banking platform in the U.S. to offer secure and seamless account verification services, providing our customers with enhanced payment options and advance open banking around the world,” said Sudev Balakrishnan, chief product officer at Worldpay Merchant Solutions, FIS.

Driving responsible lending and increasing access to capital

Through a new partnership with Zip, Mastercard’s open banking technology, provided by its U.S. open banking arm Finicity, will enhance the real-time underwriting process of Zip’s lending program. Together, the companies are helping consumers more easily budget for larger purchases that can be paid over time¹.

“Zip is valued for helping customers with managing their expenses and providing access to a financial cushion in times of unexpected expenses,” said Larry Diamond, co-founder and U.S. CEO of Zip. “Our partnership with Mastercard helps us continue to deliver a positive payment experience for our customers.”

When it comes to lending, small businesses also face obstacles getting access to capital. In the U.S., 52% of small businesses say their financing needs aren’t met. Earlier this year, Mastercard added advanced analytics to its open banking services to help lenders manage their risk profiles, while adding inclusive credit models for small business loans, including ongoing monitoring and expansion of credit lines.

“Open banking solutions can speed up the lending process so consumers and SMEs are able to get quick access to funds they need and get back to running their businesses and completing purchases,” said Daniel Keyes, senior analyst at Javelin Strategy & Research. “It’s particularly important that SMEs and consumers are only given funds that they’re in a position to pay back, and open banking can help make sure underwriters have access to the financial information needed so neither ends up overextended.”

Scaling open banking across the globe

Mastercard is co-innovating with partners across the ecosystem to establish broad connectivity and data services to support customers, including access to more than 95% of deposit accounts in the U.S. and 3,000 banks across Europe. Mastercard also recently announced a partnership with European-wide investment platform Saxo Bank, which enables Saxo Bank customers to seamlessly add money to their investment accounts through an embedded platform using open banking.

“We’re accelerating our open banking connectivity across the U.S., Australia and Europe, leaning into the breadth of Mastercard’s global network, expertise in data and privacy, and trust of our brand,” said Jess Turner, executive vice president, Global Open Banking & API at Mastercard. “We’re providing more payment choice, redefining how identity is established and authenticated, and opening doors to tailored solutions that will revolutionize financial experiences.”

Mastercard at Money20/20 USA

Join Mastercard at Money20/20 in Las Vegas from October 22-25 to experience how Mastercard is driving the future of finance through simple, safe and smart solutions. Throughout the show, the Mastercard booths (#6800 and #6910) at the Venetian Convention & Expo Center will showcase interactive demos highlighting open banking and payment innovations including AI, fraud prevention and more.

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

www.mastercard.com

¹ Loans through Zip Pay Anywhere and Zip Web Checkout (including any "powered by Zip" loans) are originated by WebBank, except for Zip-originated loans in Colorado, Massachusetts, Maryland and Nevada. All loans are subject to credit approval.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231017363193/en/

Jen Langione

Global Communications

+1 (917) 408-2941

jen.langione@mastercard.com

Jenna Saper

North America Communications

+1 (914) 249-1069

jenna.saper@mastercard.com

Source: Mastercard Investor Relations

FAQ

What is Mastercard's approach to open banking?

Mastercard is partnering with leading players to scale open banking-powered solutions, enabling more payment choice, empowering consumer lending, and modernizing account-based payments.

How does Mastercard protect payment transactions?

Mastercard uses AI technology to protect over 125 billion payment transactions annually, reducing the risk of fraud.

What partnerships is Mastercard forming for recurring bill payments?

Mastercard is working with J.P. Morgan Payments and Worldpay to make recurring bill payments frictionless and secure.

How is Mastercard enhancing the lending process through open banking?

Through a partnership with Zip, Mastercard is enhancing the real-time underwriting process of Zip's lending program, making it easier for consumers to budget for larger purchases.

Where is Mastercard expanding its open banking connectivity?

Mastercard is expanding its open banking connectivity across the U.S., Australia, and Europe.