Mastercard launches open banking payments tools

Mastercard has unveiled a pair of open banking tools designed to improve predictability and transparency in digital account-to-account payments for merchants.

Using real-time bank account information permissioned by the consumer, Payment Success Indicator lets the payment originator i.e., a merchant, a bank, a digital wallet, or payment service providers to assess a consumer’s balance and historical behavioural risk patterns for each transaction.

The Payment Routing Optimizer interprets that score and recommends the optimal day and payment rail (such as Same Day ACH or Next Day ACH) taking into account cost, speed and risk.

The Payment Success Indicator and Payment Routing Optimizer is developed by Finicity, the open banking specialist acquired by Mastercard in 2020. It uses advanced data analytics and machine learning to make the payment experience safer and smarter.

Payment Success Indicator and Payment Routing Optimizer work hand-in-hand. The Payment Success Indicator leverages open banking data - consumer-permission data that the consumer controls but Mastercard manages - and uses AI and machine learning to process the data and provide the merchant with a better score and prediction when determining if a transaction will be successful or not, based on the timing, the amount and the type of transaction.

Silvana Hernandez, Senior Vice President of Digital Payments for Mastercard, said “It's all about consumer convenience, providing consumer choice and really listening to consumers' desires to have access to different security types and ease of use -- that's at the center of these news tools.”

Mastercard said that Payment Success Indicator and Payment Routing Optimizer are currently limited to the rental home space, with general availability scheduled for later this year. The first customer of these tools now is Bilt Rewards Alliance, which is a collection of more than two million rental homes in the US that enables renters to earn points by paying rent.