In a recent episode of Connected Payments by IXOPAY, host Morgan Morrill sat down with Ian Morrin, Head of UK and EU Payments at Tink, to discuss the transformative impact of open banking and the rise of Pay by Bank solutions across Europe. With Tink's expansive reach—connecting to over 6,000 banks and financial institutions across 19 markets—he offers a front-row perspective on how open banking is reshaping the financial landscape.
Tink’s Role in the Open Banking Ecosystem
Founded in 2012 and acquired by Visa in 2022, Tink has established itself as a leading open banking platform in Europe. The company provides a single API that enables access to aggregated financial data, payment initiation services, and personal finance management tools. This infrastructure allows banks, fintechs, and startups to develop data-driven financial services efficiently.
Morrin explains that Tink operates across two main areas of open banking: Account Information Services (AIS) and Payment Initiation Services (PIS). AIS involves reading and enriching financial data, while PIS focuses on initiating payments directly from consumers' bank accounts. This dual capability enables Tink to serve a diverse range of clients, from large banks to merchants and payment service providers.
"Open banking has two main components: reading data and initiating payments. At Tink, we do both—enabling businesses to access, enrich, and act on financial data while also initiating secure, real-time payments."
Ian Morrin, Head of UK and EU Payments at Tink
The Impact of Visa’s Acquisition
Since joining the Visa family, Tink has leveraged the global reach and technological expertise of its parent company to scale its operations. Morrin highlights that Visa's extensive network has amplified Tink's market presence, allowing for greater engagement with merchants, PSPs, and platforms across Europe. Additionally, Visa's legacy of technological innovation has bolstered Tink's infrastructure, enhancing its ability to deliver secure and efficient open banking solutions.
Merchant Opportunities in Open Banking
Open banking presents significant opportunities for merchants, particularly in streamlining payment processes and reducing fraud. Morrin notes that account funding use cases, such as topping up wallets for investments or gaming, are gaining traction due to their simplicity and cost-effectiveness.
A notable example is Tink's collaboration with Deutsche Bahn, the national railway company of Germany. By integrating Tink's account verification services, Deutsche Bahn has mitigated fraud associated with direct debit sign-ups, where users previously entered invalid or stolen international bank account numbers (IBANs). This integration has not only reduced fraud but also simplified the customer onboarding process and lowered operational costs.
"Two years ago, people just dropped in open banking without thinking. Now it’s about thoughtful deployments that enhance the user experience—and that’s where we’re seeing real growth."
Ian Morrin, Head of UK and EU Payments at Tink
Adoption Trends and Milestones
Tink's thoughtful deployment of open banking capabilities has led to significant adoption milestones. The company now supports over 10,000 merchants through its PSP partners, spanning various sectors from e-commerce to account funding. Furthermore, Tink has surpassed €100 million in daily transaction volume, indicating robust growth and increasing trust in open banking solutions.
These achievements align with broader industry trends. The global open banking market is projected to grow at a compound annual growth rate (CAGR) of 24.4% from 2021 to 2028, with Europe leading the charge. As of 2022, more than 3,000 open banking APIs were active across Europe, and over 80% of banks worldwide plan to invest in open banking technology by 2025.
Regulatory Landscape and Future Outlook
The regulatory environment in Europe continues to evolve, fostering the growth of open banking. The upcoming implementation of PSD3 aims to standardize APIs and enhance the consistency of open banking services across member states. Additionally, the instant payment regulation set to take effect in October mandates that all Eurozone accounts support instant payments, further facilitating real-time financial transactions.
Beyond Europe, open banking initiatives are gaining momentum globally. Countries like Brazil have implemented systems like PIX, demonstrating the potential for open banking to revolutionize financial services worldwide.
The Excitement of Innovation in Open Banking
Morrin expresses enthusiasm about working at the intersection of open banking, fintech, and payments. He emphasizes that the field attracts innovative thinkers focused on enhancing customer experiences, reducing costs, and improving security. With Visa's support, Tink is well-positioned to continue driving innovation and delivering value to both consumers and businesses.
Tink's journey illustrates the transformative power of open banking in modernizing financial services. By providing secure, efficient, and user-friendly solutions, Tink is not only facilitating seamless transactions but also contributing to a more inclusive and competitive financial ecosystem. As open banking continues to evolve, companies like Tink will play a pivotal role in shaping the future of payments.
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