11/11/2024

AWS and Plaid Advance the Business Case for Open Banking and Pay by Bank

PYMNTS

It’s still premature to say that open banking and pay by bank have truly arrived in the U.S. However, with the Consumer Financial Protection Bureau (CFPB) issuing the final Rule 1033 draft on Oct. 22, they certainly have more momentum.

The ruling seems to have raised as many questions as it answered, especially about liability and operational compliance changes in the banking and FinTech sector. One thing, however, is certain: Financial services companies of all shapes and sizes have waited for the CFPB to move the needle on open banking and pay by bank to advance them, and consumers may finally be ready to follow their lead.

Although the interview took place just before the official CFPB ruling came down, the spirit and intent of progressing toward open banking and pay by bank was evident in a recent conversation between Karen Webster, CEO of PYMNTS, Brian Dammeir, head of payments for Plaid, and Paul Chang, global payments market development for AWS.

As all three noted, since the advent of open banking in the U.K., consumer expectations and behaviors surrounding financial services have changed. Initially focused on the secure exchange of financial data, open banking is now evolving toward more seamless payment solutions, among them pay by bank.