Open banking and innovations in the pipeline

“I’m most interested in open banking in the UK to access ‘PaybyBank’ functionality,” says Valero Energy’s Mozie “My assumption is you lose card fees that way, which are ridiculously high.”

Mozie is focused on payment acceptance, but aware of down-the-line benefits for his treasury colleagues from better compliance and liquidity tools, which could emanate from the improved connectivity and data exchange that result from widespread open API usage.

The recent settlement of the long-running litigation against Visa and Mastercard in the US over credit card intercharge rates, which could save merchants there $30bn over five years, gives an illustration of the figures involved if ‘PaybyBank’ becomes an accepted payment methodology in the UK, as it is elsewhere.

“I’m interested in using non-sweeping VRPs in the UK under the open banking regulatory drive – so-called account-to-account [A2A] – to make P2P payments from a customer to us easier. But these cheaper, non-card payment options are not yet broadly available in the UK, which is frustrating,” admits Mozie. 

Open banking: ‘Let’s get on with it’

“You can do some non-sweeping VRPs under UK open banking,” concedes Mozie. “I know of instances, such as NatWest, where you can move money A2A. But only if the two parties bank with them. I need it to be interbank, regardless of the bank. Similarly, [the fact that] taxpayers are able to pay HMRC [via open banking] isn’t much benefit to a corporate.”

“There are currently very limited open banking use cases for in-person, in-store payments. PaybyBank functionality already exists in the US for our retail partners there. I want it in the UK, Ireland, everywhere. On all formats of payment.”

The southern Republic of Ireland’s geography is covered by the PSD2, which is akin to the UK’s regulation and similarly designed to encourage the use of open APIs. But again, adoption isn’t fast enough for merchants such as Valero Energy.

This is a shame considering that PSD3 is already on the horizon, including a proposal for a new payment services regulation (PSR) and updated open banking rules. The latest iteration provides rules for the authorisation and supervision of non-bank PSPs in the EU and aims to protect consumer rights and personal information further, while improving competition.  

“We’ve been waiting too long for this. It’s time to get on with it now. I understand there are UK arguments about the commercial model pricing and a dispute resolution about who pays in the event of any failed VRP transactions. But it needs sorting now, as other countries already have ‘PaybyBank’ functionality and more data-centric tools as well, driven by their greater encouragement of API sharing.”