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Industry roundup: 16 February

Powering open banking, crypto and ESG through Mastercard’s new consulting approach

With the on-going digital transformations in the financial world, Mastercard is expanding its distinguished payments consultative services to include new approaches pertaining to open banking, open data, crypto and digital currencies, along with environment, society and governance (ESG) to drive corporate growth.

According to the press release, consulting has been an important part of Mastercard's customer relationships for over twenty years, whether it's developing multi-rail payment strategies or providing advice on data governance opportunities. Mastercard's Data & Services consist of more than 2,000 data scientists, engineers and consultants serving clients in 70 countries globally. Mastercard is expanding this team by adding over 500 recent graduates and young professionals.

Mastercard’s consultants leverage data-driven insights, consulting and product development services (in line with Mastercard's Data Responsibility Principles) to help businesses maximize open banking opportunities. Mastercard recently collaborated with a banking group in Eastern Europe by initially creating a prototype multi-banking app (currently LIVE) that enables users to manage their multi-bank accounts conveniently.

In recognition of the rise in digital currencies within the banking industry, Mastercard's advisory team works with banks and merchants covering a variety of digital currency opportunities, from early-stage education, risk assessment and bank-wide development of crypto and NFT strategies to the design of crypto cards and crypto loyalty programs. Additionally, Mastercard has organized partnerships with new digital companies that offer the best cryptocurrency solutions and has helped fintechs expand into new markets through actuation (go-to-market) planning and commercialization strategies, such as enabling central banks to investigate the design and deployment of the central bank digital currency (CBDC) using Mastercard's test platform.

With the evolving concern of ESG compliance by consumers and businesses, MasterCard’s consultants are able to equip customers with their expertise on incorporating ESG strategies and action plans into their business goals and objectives. Recently, a Latin American bank partnered with Mastercard to combat climate change (forest restoration) through the Priceless Planet Coalition, potentially increasing card usage.

Update to ISO 20022 via Nacha mapping guide and tool

According to Nacha, an update to the ISO 20022-to-ACH Mapping Guide & Tools contains background information, descriptions, examples and detailed data mapping between ISO 20022 messages and the corresponding ACH transactions. Additionally, the updates are revised in line with Nacha’s recent rule changes, such as the expansion of same day ACH, return reason code changes and the added ability for an originator to identify recurring or single entries, or an entry initiated as part of a standing authorization. The Mapping Guide & Tool currently includes mapping for Notifications of Change.

Financial institutions will be able to use a standardized method for translating ISO 20022 messages to and from Nacha's ACH formats. Additionally, the Nacha guide helps banks support corporate customers using ISO 20022 to initiate ACH payments and enables businesses to streamline their processes, increase efficiency and reduce overhead and costs. For more information, visit Nacha's ISO 20022 Resource Center.

George Throckmorton, Managing Director and Executive Director of Afinis Interoperability Standards, Nacha, commented on the importance of keeping the ISO 20022-to-ACH Mapping Guide & Tool current as the ACH Network continues to evolve. The current update is in alignment with current Nacha Rules.

Crypto accessibility expanded through ApolloX and Banxa via Visa and Mastercard

As the crypto ecosystem gains momentum, financial tech companies are leveraging their technology to make crypto trading accessible to everyone. Converting fiat money into digital assets has been a barrier for new traders starting in the world of crypto trading. Using this fiat money gateway, ApolloX, a crypto exchange platform company launched in 2021, continues its global mission to make crypto and blockchain available to the public. Apollo X, the world's first centralized-decentralized exchanges (CEX-DEX) hybrid crypto derivatives exchange, partners with Banxa, the world's first listed payment service provider (PSP) and RegTech platform for the digital assets industry.

ApolloX now provides users the capability to purchase cryptocurrencies using Visa or Mastercard credit and debit cards. Over 20 fiat currencies, including USD, EUR and AUD, can be converted to USDT, BUSD and ETH. Additionally, Banxa will integrate with ApolloX's centralized (CEX) and decentralized exchanges (DEX) as two separate entities (a first time launch of the DEX model with Apollo X, according to the press release). Additionally, the founder of Apollo X commented that the partnership with Banxa will provide users access to on-ramp solutions, an easy-to-use fiat payment platform and an assortment of digital assets and blockchains around the world.

A2A payment solutions enabled by Discover and Bank of America

According to The Wall Street Journal, an announcement is expected later this week on the partnership between Discover and payments fintech Buy It Mobility (BIM). This partnership will enable partner merchants to accept card-free payments, and customers will be able to pay directly from their bank account using the merchant app. Transactions will be processed through the automated clearing house (ACH) network.

Discover’s integration will benefit its merchants by reducing reliance on card, saving them interchange fees (the fee network charges merchants for accepting card payments). In turn, the savings can be passed down to customers in the form of discounts, encouraging repeat purchases, and closer merchant relationships. Additionally, Discover will use this integration to improve its position as a payment provider. Some of the benefits are increased use of the ACH network powering A2A transactions and increased opportunities for B2B payments and healthcare transactions. The amount of ACH increased by 8.7% in 2021 compared to 2020 (Figure 1: Nacha chart below).

Bank of America’s Pay by Bank service will enable e-commerce retailers in the UK to accept account-to-account (A2A) payments. The customer chooses Pay by Bank at checkout and selects the bank from the menu. Per the press release, this feature is not exclusive to Bank of America customers, and transactions are authenticated in open banking.

Bank of America plans to introduce Pay by Bank to additional markets globally, and the United States may soon consider the issuer’s large domestic footprint in the country. Additionally, Bank of America can deepen its ties to open banking where fintechs such as Plaid and Mastercard’s Finicity are rapidly gaining ground. According to Juniper Research, transactions facilitated by open banking are expected to reach US $ 116 billion worldwide by 2026.

Open banking services through APIs using Netbank in the Philippines

Netbank, a fully regulated bank that provides banking-as-a-service solutions based in Southeast Asia, has introduced Netbank Virtual, an open access web-based platform (API-powered) enabling fintechs and businesses to easily browse, test and integrate Netbank's financial products and solutions in the Philippines. Gus Poston, co-founder, Netbank, commented that Netbank Virtual accelerates collaboration between fintechs and banks quickly.

Brankas, an open finance technology company in Southeast Asia, partnered with Netbank to empower the next generation of fintechs and enable financial inclusion and customer flexibility. Additionally, Brankas' technical expertise combined with Netbank's banking-as-a-service approach will provide automated account opening, payments, disbursements, cards and loans via digital channels such as white labelled mobile apps and banking-as-a-service APIs in a more streamlined and cost-effective manner than through traditional channels.

Netbank Virtual offers a variety of features that enable self-service integration and end-to-end onboarding:

  • multiple integration points: allows companies to integrate Netbank's banking services into their processes directly through API integration or file upload platforms.
  • sandbox environment: provides companies access to an environment where they can test different products and integration options to see how they fit into their products and processes.
  • complete set of documentation: enables businesses to know the value of the product and developers to start the integration without contacting the Netbank team.
  • self-service onboarding process: provides companies the ability to easily join as a Netbank partner and enables them to carry out the process of getting the service up and running with minimal Netbank intervention.
  • full-suite dashboard: provides companies access to a set of tools on the partner dashboard to generate credentials, track transactions and manage bank accounts. 
  • embedded support ticketing system: enables enterprises access to easy-to-use tools to contact the Netbank team for any type of request, customization, integrated support or problem escalation.

In addition, Netbank Virtual will launch its first set of open financial services that can easily be accessed through the site, such as account-as-a-service (first bank to provide bank accounts-as-a-service via APIs in the Philippines), disburse-to-account, virtual collection accounts, loan management and card management.

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