Mastercard Teams With Worldpay and Zip to Scale Open Banking

Mastercard is leveraging its open banking technology through partnerships announced Tuesday (Oct. 17) to provide flexible and secure lending and payments experiences for consumers and small businesses.

By partnering with key players in the ecosystem, such as Worldpay from FIS and Zip, Mastercard is scaling new open banking-powered solutions that empower consumer lending, modernize account-based payments, and offer a wider range of payment choices.

As more individuals manage their finances online, the digital landscape must evolve to prevent account takeovers and synthetic identity fraud. To address this concern, Mastercard employs artificial intelligence (AI) to protect over 125 billion payment transactions annually, guided by its data responsibility principles. These principles ensure that consumers own and control their data, benefit from its use, and have it protected.

“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, in a statement.

One area where Mastercard is easing the burden for consumers is in online bill payments. With a growing demand for choice in payment methods, especially for recurring payments, consumers expect frictionless and secure transactions. To meet this demand, Mastercard collaborates with partners like J.P. Morgan Payments to scale account-based payments using its open banking technology. This collaboration simplifies recurring biller and merchant payments made via ACH (Automated Clearing House), covering expenses such as rent, utilities, government fees, and insurance payments.

Mastercard’s open banking technology also extends to lending programs through its partnership with Zip. By enhancing the real-time underwriting process, Mastercard’s open banking technology enables consumers to budget for larger purchases that can be paid over time.

“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, said in a statement.

Small businesses often face challenges in accessing capital, with 52% in the U.S. reporting unmet financing needs, according to the Fed Small Business Survey. To address this issue, Mastercard has incorporated advanced analytics into its open banking services, allowing lenders to effectively manage risk profiles. The company has also introduced inclusive credit models for small business loans, providing ongoing monitoring and expanding credit lines. Open banking solutions can expedite the lending process, ensuring that consumers and small businesses receive quick access to the funds they need without becoming overextended.