Mastercard Launches UK-Based Open Banking Pact With Cardstream

Mastercard has teamed with British FinTech Cardstream to promote open banking payments.

The partnership will allow Cardstream to bolster its Payment Facilitation-as-a-Service (PFaaS) platform and allow customers to offer open banking payments to merchants and retailers throughout the U.K., the companies said in a Wednesday (May 7) news release.

“There’s strong demand for open banking payments as a secure and convenient way to pay alongside cards,” Adam Sharpe, CEO of Cardstream, said in the announcement.

“We’ve long collaborated with Mastercard on innovations like network tokenization and Click to Pay, and we’re excited to offer a turnkey solution that lets payment providers launch branded Open Banking Merchant Services quickly.”

According to the release, the partnership will let acquirers, payment facilitators and payment channels that use Cardstream offer their merchant customers the option to accept open banking payments alongside debit and credit cards and other forms of payment.

“The new solution expands payment choice for businesses and consumers in the UK, supporting single immediate payments (SIP) and preparing for commercial variable recurring payments — a new payment method that will allow people to pay for recurrent bills directly from their bank account — as they expectedly roll out across Europe, including in the UK, by late 2025,” the release added.

Valerie Nowak, head of open banking, APEMEA at Mastercard, noted that the collaboration is occurring as the “open banking market is set for significant growth in Europe.”

The partnership is also happening at a time when, as PYMNTS wrote last month, open banking payments remain a largely untapped opportunity.

A report by PYMNTS Intelligence and Trustly, “What Consumers Need for Pay by Bank to Catch On,” suggests that the proper incentives could be the key that opens the door to more widespread consumer adoption.

Research from the study shows that strategic incentives, especially discounts and cash-back offers, significantly increase interest even among consumers who were initially resistant. The report also stresses that while usage is modest, growth depends on effectively engaging key demographics and spotlighting the uses of pay by bank outside of traditional retail transactions.

“The report identifies a significant awareness gap as a primary hurdle, with 56% of consumers stating they are simply not familiar with pay by bank,” PYMNTS wrote. “However, the research highlights the power of incentives in bridging this gap, demonstrating a 72% increase in interest when consumers are offered cash-back discounts or loyalty benefits.”