MasterCard unveils innovations in account-to-account payments

MasterCard has reinforced its Open Banking strategy for future payment services. The group will once again rely on the American FinTech Finicity, acquired in 2020, to offer new tools to secure account-to-account payments.

FACTS

• MasterCard introduces not one but two new tools to optimise account-to-account payments.

• Payment Success Indicator, a service that allows the initiator of a payment (merchant, bank and other payment or service providers) to assess the risk of its future customer or debtor on the basis of the analysis of his account statements and the balance available in his bank account, in real time. A score is thus assigned to each profile analysed.

• Payment Routing Optimizer then interprets this score and recommends an optimal day of debit.

• These two services are integrated as a new brick in Finicity's offer.

• The services are expected to be available in 2022 in the US only.

• Finicity targets its offer to professionals and already announces that Bilt Rewards Alliance (a reward program for good paying tenants) will be its first customer to deploy the Payment Success Indicator offer within its payment processes.

CHALLENGES

• Optimising payments: MasterCard says that its two new tools should enable it to optimise the cost and speed of payments through open banking.

• Securing a system: The American payment giant is also seeking to minimise the risks associated with ACH payments, the electronic transfer of funds from one account to another, via the automated clearing house.

• Keeping up with the times: A recent Mastercard "Rise of Open Banking" study found that 74% of US consumers would be willing to connect their bank accounts to automate financial tasks. 9 out of 10 consumers belonging to generations Z or Y are already connecting their bank accounts to applications.

MARKET PERSPECTIVE

• MasterCard's new initiative illustrates the consolidation of a strategy initiated a long time ago by the American payment giant (notably through the acquisition of Aiia). MasterCard is indeed planning to diversify its services as a transitional measure in the face of the emergence of account-to-account payments (credit transfers), which have been announced as the next disruptive factor for cards.

• These efforts are broader than just the Open Banking market. MasterCard is also working hard to diversify into other booming activities, such as those linked to crypto-assets or, in another register, BNPL.