Written by Modulr | Jul 24, 2025 11:00:00 PM
Open Banking is a financial set of standards that allows third-party providers (TPPs) to access customer banking data and initiate payments via APIs. With Open Banking payments, customers authenticate directly with their bank using SCA and can conduct that authentication without engaging the bank manually to process a payment on their behalf. This fosters competition and innovation in the financial industry and allows a wide range of services to be delivered by businesses other than major banks. Open Banking addresses the regulatory requirements that account administrators such as banks and other financial institutions (known as Account Servicing Payment Service Providers, or ASPSPs) have under PSD2 to open up data and payments to Third Party Providers (TPPs), subject to account holders providing authorisation. Open Banking supports a range of alternative financial services and payment offerings. Modulr combines Open Banking payments with e-money accounts, making fund flows visible and payment reconciliation automated across a huge array of business contexts. Clients can allow their customers to make payments without leaving their app or website, choose optimal payment methods for speed and efficiency and instantly be notified when funds leave or arrive.