Open Banking
Regulated data sharing, account aggregation, and pay-by-bank.
Overview
Open banking grants consumers and businesses the right to share their account data and initiate payments through licensed third parties. The UK's CMA9 mandate, the EU's PSD2/PSD3, and the U.S. CFPB Section 1033 rule each codify a different flavor of the same shift: banks must expose APIs for account data and payment initiation.
The near-term commercial impact is concentrated in pay-by-bank flows and account-aggregation use cases like lending and personal finance. The long-term impact is structural: bank data becomes a programmable layer that fintechs, treasurers, and consumers can build on.
Key concepts
Account information services
Read access to balances and transactions, used in lending, accounting, and PFM.
Payment initiation services
Initiate credit transfers directly from the user's bank account.
Pay-by-bank
A2A payment flows that bypass card rails entirely.
Section 1033
The U.S. CFPB rule formalizing consumer rights to financial data.
Sub-topics in this cluster
- PSD2 and PSD3
Europe's open banking and open finance frameworks.
- CFPB Section 1033
U.S. open banking rule-making.
- Pay-by-bank at checkout
Account-to-account payments at the point of sale.
- Variable recurring payments
Consent-based recurring debits without cards.
Frequently asked
How is open banking different from screen scraping?+
Open banking uses regulated, consent-based APIs with clear liability allocation; screen scraping relies on user credentials and is being phased out where regulators have intervened.
Will pay-by-bank replace cards?+
It will compete in specific contexts - high-value, recurring, and merchant-incentivized - rather than fully replace cards in the foreseeable future.
Sources & References
External references are cited for context and discovery. CashlessTechnology.com is not affiliated with the listed organizations unless explicitly stated.
Continue reading
Related across the knowledge graph
Cross-collection links surfaced by semantic relevance.
- GlossaryRead →
Open Banking
Regulated, consent-based access to bank account data and payment initiation through APIs.
- GlossaryRead →
Pay-by-Bank
A payment flow in which funds move directly from the payer's bank account to the merchant's, often via open banking rails.
- GuideRead →
Open Banking Pay-by-Bank
A practitioner overview of pay-by-bank flows under PSD2, Section 1033, and equivalent frameworks.
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BaaS
Banking-as-a-Service - the delivery of regulated banking primitives through APIs by a licensed sponsor bank to a non-bank distributor.
- InsightRead →
Section 1033 in Practice: The U.S. Open Banking Era Begins
What the CFPB's rule means for data access, screen scraping, and the next wave of consumer fintech.
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