Third Party Providers: Open Banking
Open Banking
Open Banking is the name used by the financial industry to talk about services which let account holders share their financial information and give permission for banks and other authorised organisations to make payments from certain accounts.
Open Banking was introduced by the UK’s Competition and Markets Authority (CMA) to bring more competition and innovation to the financial services industry. It works using a secure system to let you register with other banks or authorised organisations (known as third-party providers, or TPPs) and tell your bank to let them see and use your payment account details.
It's up to you if you want to share your data. Open Banking gives the opportunity to share your information, but only if you expressly give your permission.
Payment Services Directive
The Payment Service Directive (PSD) is European law, which is translated into UK law as the Payment Services Regulation. This law tells banks and other providers how they have to process payments and other services linked to providing payment services. The PSD was updated, and one of the changes introduced similar services to those contained in the UK’s Open Banking rules.
The PSD changes mean that TPPs can (with your express permission) see information about accounts and make payments on your behalf. This applies to any payment accounts you can use online (such as current accounts, credit cards and some savings accounts).