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What Is an Open Banking Provider?

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedFeb 20232 min read

It’s a buzzword gaining traction, but many businesses are still unsure what open banking really means. Open banking allows regulated providers to share financial data, for greater convenience and efficiency. An open banking provider provides a secure platform for using this financial data in the optimal way, whether it’s streamlining the payments process or accessing personalized financial products. Here’s how it works.

What is an open banking provider?

Open banking only works with the full consent of users, with providers giving a secure way to manage money with accompanying apps and platforms. Its structure allows third-party providers (or TPPs) to access accounts or make payments. An open banking provider is essentially a regulated third-party bank or service using this technology.

Here are just a few functions that open banking providers perform:

Aggregate multiple financial accounts in one place
Use APIs to share data more efficiently
Offer real-time data analysis and updates
Give clients more control over their data on third-party apps
Manage subscriptions and make secure payments

Types of open banking solution providers

With a wide range of potential benefits and services, there are many open banking solution providers that focus on different aspects of this technology. Some are purely aggregators that pull multiple accounts into a central platform, while others focus more on providing bank-to-bank payments. Another common type of open banking platform provider is one that confirms funds before you use a card or other payment.

Generally, there are four categories of open banking provider:

Open banking platforms focus solely on providing open banking services
API platforms help manage a variety of open banking-based APIs
Aggregators focus on sharing financial details from different accounts
Banking platforms that integrate open banking solutions into a core banking facility

Who are open banking platform providers in the US?

An increasing number of major banks and software services are now offering third-party open banking solutions to their customers, as this technology grows in popularity and scope. For now, here are a few of the open banking platform providers available to US-based individuals and businesses.

Oracle has designed over 1600 APIs for use with its core banking services.
Plaid Exchange is a popular aggregator connecting financial data from apps and banks.
Apigee Open Banking is managed by Google with full Google Cloud integration and API management.
GoCardless offers an Instant Bank Pay feature for US businesses taking payments from the UK, as well as Verified Mandates to reduce fraud.

How to compare the best open banking providers

Today’s best open banking providers offer a variety of different services. To choose the right fit for your business, you’ll need to think about what you want from this technology. Are you looking for a way to aggregate accounts or gain access to data more efficiently? Or are you searching for a payment solution to better manage your invoicing process?

Not all banks will support every feature of these platforms, and some are not yet connected to open banking at all. Once you’ve decided what you need from an open banking service, you must find out whether your current bank and payment system supports the platform.

Third-party providers like GoCardless are powered by open banking infrastructure to bridge the gap between financial institution, merchant, and customer. For example, Instant Bank Pay allows merchants to send payment links to customers for one-off, bank-to-bank payments with instant confirmation. This shows the potential benefits of open banking providers, minimizing effort for both payer and payee. In this way, open banking payment services not only boost customer satisfaction, but also reduce failed and delayed payments – all of which improves cash flow.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.