Mastercard to Launch New Open Banking-Powered Digital Account Opening Experience

Mastercard is preparing to launch a new digital account opening experience for select U.S. debit and prepaid products.

The program will use open banking solutions to streamline and secure the account opening process, Mastercard said in a Wednesday (Feb. 28) press release. It is expected to be made generally available in the first half of 2024.

The Open Banking for Account Opening program will provide a set of open banking products as a core benefit to Mastercard consumer and small business debit issuers, as well as consumer prepaid issuers in the U.S., according to the release.

The program is designed to improve the digital account opening process by verifying account ownership, lowering account abandonment rates, reducing non-sufficient fund returns by using real-time balance checks, and minimizing the manual entry of payment credentials, the release said.

This move comes as Generation Z mobile banking adoption continues to rise, with a projected increase to 47.8 million by 2026, per the release.

“Today’s digital consumer is increasingly opening bank accounts online, gravitating towards the convenience and efficiency of the experience versus more traditional manual methods,” Silvana Hernandez, executive vice president of product and engineering for North America at Mastercard, said in the release.

To help meet this demand, Mastercard will offer participating U.S. issuers free access to Account Owner Verification, Account Detail Verification and Account Balance Check solutions when used to support digital account opening of Mastercard branded consumer and small business debit products, as well as general-purpose reloadable consumer prepaid products, according to the release.

The Open Banking for Account Opening program uses consumer-permissioned data, industry standards for safe data exchange and machine learning to support this digital account opening experience, the release said.

The announcement of this program follows the May launch of Mastercard’s Open Banking for Account Opening solution that helps financial institutions and FinTechs in their digital account opening for digital wallets, new bank and investment accounts, distributions and account-based payments.

Mastercard’s open banking technology via its Finicity footprint in the U.S. has been extended to 90% of the company’s deposit accounts, management said Feb. 2 during a quarterly earnings call.