Mastercard gives US debit, prepaid issuers account opening boost

Ellie Duncan
01 Mar 2024

Mastercard Open Banking has introduced the ‘Open Banking for Account Opening’ program in the US, which is a new benefit program for its consumer and small business debit issuers, as well as prepaid issuers in the US.

The program intends to improve the digital account opening process by verifying account ownership, lowering account abandonment, reducing non-sufficient fund returns, and minimising the amount of manual entry of payment details that is typically required.

Real-time balance checks enabled by Open Banking help to reduce the costs associated with non-sufficient fund returns, while rapid account funding and a smoother customer experience can lower abandonment and inactive accounts.

Participating US issuers that opt into the program will be offered free access to Mastercard’s ‘Account Owner Verification’, ‘Account Detail Verification’ and ‘Account Balance Check’ solutions, when used to support digital account opening of a Mastercard-branded consumer and small business debit and general-purpose reloadable consumer prepaid product.

Among Gen Z – defined as individuals born between the mid-1990s and the early 2010s – mobile banking has risen 12.4% year-over-year, from 20.7 million in 2020, and is expected to hit 47.8 million by 2026, according to a study by Insider Intelligence.

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

“The Open Banking for Account Opening program provides another entry point to the digital economy through valuable and secure experiences that lean into the power of consumer-permissioned data.”

Earlier this year, Mastercard selected 15 startups from around the world to take part in its ‘Start Path’ engagement programs, focused on small business and Open Banking, respectively.

The six companies chosen for its Open Banking program will receive exposure to its Open Banking technology, data connectivity and analytics offerings.