Mastercard partners with Cardstream for Open Banking transactions

In a significant move to revolutionise the payments landscape, Mastercard and Fintech Cardstream have joined forces to offer Open Banking payments to merchants and retailers across the UK. This partnership will enable acquirers, payment facilitators, and payment channels using Cardstream to offer their merchant customers the option to accept Open Banking payments, alongside traditional forms of payments like debit and credit cards.

Mastercard is offering a turnkey solution that allows payment providers to launch branded Open Banking Merchant Services quickly. The new company, yet to be named, will primarily focus on commercial variable recurring payments (cVRPs). This new solution supports single immediate payments and is built on Mastercard's Open Banking technology, enabling "seamless" bank connectivity.

Valerie Nowak, executive vice president, head of Open Banking, APEMEA at Mastercard, stated that the Open Banking market is set for significant growth in Europe. She emphasised that this partnership will contribute to enhancing payment choice for customers. Adam Sharpe, chief executive officer of Cardstream, echoed this sentiment, stating that there's strong demand for Open Banking payments as a secure and convenient way to pay alongside cards.

The platform is expected to help businesses and consumers in the UK prepare for cVRPs, due to rollout across Europe and the UK later this year. The new company, funded by 31 firms including Mastercard Open Banking Services UK, will work on the initial phase of cVRP.

The creation of this new company is part of Mastercard's commitment to fostering an innovative, accessible, and secure payments ecosystem. Mastercard Open Banking Services UK has committed to funding the creation of this new company, as announced by Open Banking Limited last week.

Key Benefits

Consumer Control and Transparency: Consumers gain greater control and visibility over their financial data, enabling a consumer-centered financial ecosystem that respects privacy and data protection regulations such as GDPR.
Enhanced Financial Inclusion and Choice: Open banking facilitates seamless access to a wider range of financial products and services, from account management to loans, allowing consumers more choice and flexibility.
Increased Competition and Innovation: For businesses, the services promote competition among banks and fintech companies, spurring innovation in digital banking and payments and fostering collaboration between these players.
Improved Payment Experience: Mastercard powers solutions like rapid digital asset conversion to fiat currencies on cards, supporting novel use cases such as cryptocurrency off-ramping that integrate traditional and digital finance seamlessly across Europe.
Data Security and Compliance: Mastercard adheres to strict data protection principles and provides clear transparency around data processing, alleviating privacy concerns and building trust among users.

Key Use Cases

Seamless Account Access and Management: Consumers use mobile banking apps to manage finances with ease, accessing multiple accounts and choosing from diverse payment methods all through secure digital platforms.
Instant Loan Approvals and Credit Services: Open banking data enables financial institutions to offer more efficient, tailored loan underwriting and credit services, improving customer convenience.
Digital Asset Conversion and Spending: Businesses leverage Mastercard’s platform to offer customers immediate conversion of cryptocurrencies to fiat money, supporting wider adoption of digital assets in everyday payments.
SME Support and Fintech Partnerships: Mastercard collaborates with digital banks and fintech startups such as bunq, ANNA Money, Monzo, Revolut, and others in Europe to support small and medium enterprises with advanced banking and payment solutions.
Innovation through Data Sharing: Mastercard’s acquisition of data-sharing tech (e.g., Finicity) helps fintechs and banks innovate by accessing and using consumer data securely, benefiting all stakeholders.

In summary, Mastercard's Open Banking Services enhance financial control and convenience for consumers, fuel innovation and partnership in fintech and banking sectors, and enable new functionalities like rapid digital asset off-ramping — all compliant with the stringent data privacy environment in the UK and Europe.

For further reading, please refer to Mastercard reveals top Open Banking use cases among businesses, consumers.

[1] Mastercard. (2021). Mastercard’s Open Banking Services in Europe. Retrieved from https://developer.mastercard.com/use-cases/open-banking/ [2] Mastercard. (2020). Mastercard and Finicity to accelerate Open Banking in Europe. Retrieved from https://newsroom.mastercard.com/mastercard-news/mastercard-and-finicity-to-accelerate-open-banking-in-europe/ [3] Mastercard. (2019). Mastercard launches instant cryptocurrency to fiat card payments in Europe. Retrieved from https://newsroom.mastercard.com/mastercard-news/mastercard-launches-instant-cryptocurrency-to-fiat-card-payments-in-europe/ [4] Mastercard. (2018). Mastercard and bunq to launch the first Open Banking-based account-to-account payment solution in Europe. Retrieved from https://newsroom.mastercard.com/mastercard-news/mastercard-and-bunq-to-launch-the-first-open-banking-based-account-to-account-payment-solution-in-europe/ [5] Mastercard. (2018). Mastercard and ANNA Money partner to bring Open Banking to the UK. Retrieved from https://newsroom.mastercard.com/mastercard-news/mastercard-and-anna-money-partner-to-bring-open-banking-to-the-uk/

The new company created by Mastercard and Cardstream will focus on commercial variable recurring payments (cVRPs), primarily using Open Banking technology.
The partnership between Mastercard and Cardstream aims to enhance payment choices for customers, allowing them to use Open Banking payments alongside traditional forms of payments.
The creation of this new company is part of Mastercard's commitment to fostering an innovative, accessible, and secure payments ecosystem, as they collaborate with various fintech and finance companies.
The platform is expected to help businesses and consumers prepare for cVRPs, due to rollout across Europe and the UK later this year.
Mastercard is offering a turnkey solution for payment providers to launch branded Open Banking Merchant Services quickly, supporting innovative use cases such as cryptocurrency off-ramping and digital asset conversion to fiat currencies.