How does open banking work?
Under the EU’s PSD2 and the UK’s equivalent rules, banks must let licensed third parties access online payment accounts when the customer consents. The UK Financial Conduct Authority describes two regulated services: an account information service, an online service that provides consolidated information on one or more payment accounts held with other providers, and a payment initiation service, an online service that initiates a payment order at the customer’s request from an account held at another provider. In a checkout, the customer picks their bank, authenticates in the bank’s app, approves the payment and returns to the merchant.
Why does open banking matter for merchants?
It offers a bank payment without card details, card network declines or card chargebacks, with strong customer authentication done by the bank. As an illustrative example: an online store offers pay-by-bank next to cards in a market where it works well. If 2,000 of 12,000 monthly payments move from cards approving at 70% to pay-by-bank completing at 85%, the store gains about 300 completed payments, and the money arrives over the bank rail rather than through card settlement.
What are the limits?
Coverage depends on each market’s rules and on bank participation. Frameworks differ, from PSD2 in the EU and the UK’s own rules to national schemes elsewhere, so availability in CIS, MENA and LATAM varies by country and provider. Conversion depends on how smooth each bank’s app flow is. And account information access needs clear consent handling and data protection.
Where does Omno use it?
Omno connects bank transfer, instant payment and other local methods through its PSPs and shows them in the hosted checkout according to eligibility rules by country, method, customer group and customer verification level, with final statuses delivered by webhook.