Open banking gives people more control over their financial data and provides new opportunities for small businesses, including quicker payments, easier loan or financial account application and the ability to create a one-stop shop for financial record-keeping and examination.
The technology behind open banking relies on application programming interfaces (API), which facilitate the sharing of information between two apps in order to quickly and accurately get business done.
With open banking, your customers pay through their mobile banking app, making the transaction experience easy, ensuring quick payment and eliminating merchant processing fees.
If you’re a small business owner or a budding entrepreneur without an established financial history, the data-rich properties of open banking may offer the pertinent financial information you need to secure business financing, open a bank account or be approved for a business line of credit or credit card.
It’s hard work running a business. When you’re not focused on the function of the business, you’re probably working on the finances, the marketing or the payroll. With open banking, you can streamline some of the processes of running your business with information automatically compiled and organized in one place.
If this is the first you are hearing about open banking, you’re not alone. The banking phenomenon has taken off in other parts of the world, but the U.S. has been slower joining the trend. In June of 2020, Mastercard acquired Finicity, bringing together Mastercard’s existing technology and expertise with Finicity’s new analytics platform in order to streamline the credit decisioning process for consumers and small businesses, improve payment experiences and advance Mastercard’s position as a leader and strong open banking partner.