Innovation

Q1 2022 Open Banking tracker

July 1, 2022

In the first quarter of 2022, the open banking market in Europe continues to mature and stabilize, as home TPP growth slows. The total number of third-party providers at the end of March was 535, an overall increase of 6 (1.1%).  

As the market matures, a higher number of licences are being withdrawn. Over the first three months of 2022, 9 TPPs from 7 different countries had their licence to provide Open Banking services withdrawn. Belgium and Sweden both had 2 licences removed, with the rest of the countries limited to 1 removal. A number of factors can contribute to the licensing losses. Mergers and acquisitions, business failures and complex regulatory requirements can all contribute to fluctuation in net gain or loss. While these removals have resulted in a low net growth number, passporting has been on the rise as TPPs grow their businesses by launching in new markets, and the number of Open Banking payments in both the U.K. and EEA continues to grow.

“The growing number of TPPs who are having their licenses withdrawn, often at short notice, is creating an urgent need for banks to have a tool to check TPP licence status in real time and keep unauthorized providers from accessing customer accounts. That’s exactly what Mastercard Open Banking Protect is designed to do – to give banks confidence when providing data to or enabling a payment for a third party,” says Jim Wadsworth, senior vice president for open banking at Mastercard.

 

Headlines at 31 March 2022:

  • 535 third-party providers were registered with a National Competent Authority in Europe. 316 third parties were registered in the EEA, while 219 were registered in the U.K.
  • Sweden has overtaken Germany and now has the highest number of home TPPs in the EEA (38), and Spain continues to have the highest number of passported TPPs, reaching 113 at the end of March 2021.
  • Between Q3 2021 and Q1 2022, the number of EEA countries with 100 or more passported TPPs has grown from zero to ten, continuing an emerging passporting trend.
  • Nine TPPs from seven different countries are no longer authorised to provide open banking services. 

Our European open banking tracker is brought to you in collaboration with Konsentus, the software as a service company in which Mastercard is invested and that helps to power Open Banking Protect. For more information about Mastercard Open Banking Solutions, visit openbanking.mastercard.com, and register your interest to learn more.

Read a full summary of growth and progress in Open Banking for Q1 2022 below.

 

Open Banking to the end of Q1 2022

Number of registrations

Following our pattern, we will report on total third-party registrations in Europe, showing consolidated figures and where appropriate, breaking out the UK and the EEA. At 31 March 2022, the total number of third-party providers that were registered with a National Competent Authority to provide open banking services in Europe was 535, 219 were in the UK and 316 in the EEA. 

Growth in open banking third party registrations

Last quarter the growth was 2.1%, this quarter the growth is 1.1%, dropping for the third quarter in a row. There was a net gain of 6 third-party providers. 

 

Location of registrations

Spain added another 7 TPPs to maintain its lead as the top passporting country with a total of 113. Italy was a close second, adding 7 passporting TPPs for a total of 109. Germany, Netherlands, Finland and Portugal all added 7 passporting TPPs as well.

The Netherlands again saw an increase of 2 new home TPPs, the largest of any country, while Denmark saw the largest decrease at 2. Sweden added 3 home TPPs, but lost 2. 

Hungary had the largest increase in passported TPPs at 8. Portugal moved up the top 10 for the second quarter in a row, this time moving ahead of Belgium for sixth place. France was again leapfrogged, this time by Austria, which is now in the number 7 spot. While the order has slightly changed, the top 10 countries for home-regulated TPPs remained unchanged.

In Q1 2021, each EEA country had at least 43 total TPPs. At the end of Q1 2022, each country had at least 63, representing a 46% increase over one calendar year.

All countries now average over 103 third-party providers (home and passported or registered under the Temporary Permissions Regime).

Open banking third party registrations by country

This quarter, the Brexit transition period has ended, EEA-based firms can no longer passport into the UK. Where necessary, they will now need to be authorised and regulated by the PRA and/or the FCA in the UK. EEA-based investment funds also fall under this umbrella and can no longer be marketed under a passport in the UK.

 

Types of solutions

Now that EEA-based firms can no longer passport into the UK, tracking will be limited to EEA numbers. Of the 12 newly-appointed TPPs this quarter, 8 are authorised to provide payment initiation services (PIS), despite higher regulatory requirements than providing account information services (AIS). 

Open banking third party registrations by type

Provision of services based around account data have long been most common among new participants to the market, but growing confidence in the functionality and security of open banking payments among providers and users continues to drive additional registrations as dual providers.

Open banking at Mastercard

Mastercard’s European Open Banking platform has announced a new payment feature, Pay by link. The new payments feature ties directly into Mastercard’s open banking vision of ushering in a new era of choice, simplicity and personalization in a safe and secure manner.

“We’re in the process of transforming the way people pay bills. With a simple link, we make it easy and secure to pay a bill on the go with a bank account without having to enter or remember payment details. With Pay by link, we give businesses the opportunity to accept and receive payments anywhere and reduce friction in the entire payment flow,” says Rune Mai, co-founder and CEO of Aiia, a Mastercard company.

With a simple payment link, businesses can both send out an invoice and get paid in any given context, removing friction with a straightforward, one-step process. The link takes customers through a trusted Open Banking payments flow with their own bank.

The new feature is bridging the opportunity gap between open banking payments and a wide range of businesses. Aiia is enabling broader customization options for its link payments, granting its customers the opportunity to build and brand a fully embedded payment experience. The feature is already being rolled out in the Nordics and is expected to hit the full European landscape throughout 2022.

 

Information correct as of 31 March 2022
Data (unless otherwise sourced) is provided by Konsentus. Analysis of EEA National Competent Authority and European Banking Authority PSD2 registers

In June 2019, Mastercard led a multi-million-pound pre-Series A funding round in Konsentus