Open banking explained

Yes, open banking is highly secure because it uses encrypted APIs and requires that shoppers authenticate directly within their own bank's secure environment. The business never sees, stores, or accesses the shopper's login credentials.

No, shoppers do not need to create any new accounts or download third-party applications. They simply authenticate using their existing online banking credentials during the checkout or verification process.

An Application Programming Interface (API) is the software bridge that allows a business's technological system to communicate securely with a shopper's bank. APIs ensure that financial data is transmitted quickly, reliably, and in a standardized format.

Open banking prevents fraud by natively requiring Strong Customer Authentication (SCA), such as biometric logins or one-time passwords, directly through the shopper's banking app. This mechanism makes unauthorized access or fraudulent payment initiation incredibly difficult for bad actors.