Mastercard Expands Open Banking Capabilities With Algoan Partnership

Mastercard is expanding its European open banking capabilities with a new account owner verification tool.

The company’s verification solution, announced Tuesday (June 6) in a news release provided to PYMNTS, is being rolled out in tandem with a partnership with Algoan, a French credit decisioning specialist.

It’s part of what Mastercard says is its “commitment to embrace new networks” while expanding its open banking capabilities.

“In an increasingly digital world, bank account verification is more important than ever before,” the release said. “The launch of Mastercard’s account owner verification service automates, strengthens, and simplifies how businesses across markets and industries can verify customer bank account ownership.”

The company argues the solution will ease account opening pain points when adding payment credentials and direct debit origination for players such as digital wallets providers, payment service providers, wealth management apps, and eCommerce companies.

The Algoan partnership, Mastercard said, will help boost financial inclusion in new markets in Europe, beginning with Western Europe. The French company will use Mastercard’s open banking connectivity to power their credit scoring products.

“Open Banking data is a powerful tool to deliver better, faster, and more inclusive credit decisioning,” said Bart Willaert, Mastercard’s executive vice president for open banking international markets.

“We continue to focus on increasing our growing list of partners to deliver local market knowledge and feature rich tools that further accelerate Open Banking adoption.”

The launch follows last month’s rollout of Mastercard’s enhanced Open Banking for Account Opening solution, which provides account owner verification and identity insights in a single application programming interface (API).

“Our digital identity and open banking networks instill confidence on both sides of an interaction,” Mastercard Executive Vice President of Identity Solutions Chris Reid said at the time. “By securing our online ecosystem, we are delivering on our promise to bring more people and businesses into the digital economy.”

PYMNTS research has found that nearly two-thirds of consumers are comfortable opening new accounts digitally, particularly among younger people and higher-income individuals.

PYMNTS also looked at the state of open banking in Europe last month in a conversation with Geoffroy Guigou, COO at pan-European FinTech firm Younited.

He said that open banking technology enabled by the European Union’s Second Payment Services Directive (PSD2), has made it easier to instantly score consumers who have an atypical profile or irregular income, just by reviewing a few months of banking history.

“More than half of our total instant credit offerings are based on PSD2, so this has totally transformed our business over the last years,” he noted.