Channel

Open Banking & APIs

How your bank data and payments can flow to other apps with your permission, the laws that make it possible, and the technology that keeps it safe.

This channel explains open banking for complete beginners: what it is, how banking APIs and consent work, the EU's PSD2 and the US 1033 rule, why screen scraping is being phased out, and how pay-by-bank payments differ from cards.

Start here: read these first

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Open Banking

What is open banking, and how does it actually work?

Open banking turns your bank account into something other apps can read or pay from, but only when you say yes. Here is what that means, who controls it and what can go wrong.

8 min read

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Open Banking

How do banking APIs actually work?

Every open banking connection is a short conversation between two computers. Here is that conversation step by step, from the consent request to the data your app receives.

7 min read

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Open Banking

What is pay by bank, and how is it different from paying by card?

A 'pay by bank' button skips the card and asks your own bank to send the money. Here is what happens behind that button and where your protections differ from a card payment.

7 min read

More in Open Banking & APIs

6 explainers & comparisons

Key terms ↓

Open BankingExplainer

What is the CFPB 1033 open banking rule, and is it in force?

The United States wrote its own open banking rule in 2024, then a lawsuit and a change of course at the regulator put it on hold. Here is what the rule says and where it stands as of October 2026.

Photo: “CFPB Consumer Financial Protection Bureau entrance Washington DC 2025-02-10 11-14-45” by G. Edward Johnson, CC BY 4.0 (edited)

Open BankingExplainer

What is PSD2, and what did it change for you?

The second Payment Services Directive opened bank accounts to regulated apps, made two-factor checks normal for online payments and cut what you pay if your card is misused. Here is how it works in plain English.

Photo: “European Union Flag (4768764591)” by Håkan Dahlström from Malmö, Sweden, CC BY 2.0 (edited)

Open BankingExplainer

Screen scraping vs APIs: what is the difference, and why does it matter?

Two very different methods can put your bank data into an app. One hands over your password; the other hands over a narrow, revocable permission. Here is how to tell them apart.

Photo: “Username and password 20170626” by Santeri Viinamäki, CC BY-SA 4.0 (edited)

Key terms in Open Banking & APIs

Glossary

What does PSD2 mean?

The EU law behind open banking and the extra security step when you pay online.

Photo: “Euro coins (08)” by Lukasz Kobus - European Commission, CC BY 4.0 (edited)

Glossary

What does open banking mean?

Your bank account, connected to apps you choose, on your terms.

Photo: “19-inch rackmount Ethernet switches and patch panels” by Dsimic, CC BY-SA 4.0 (edited)

Glossary

What is an API?

The hidden doorway that lets apps talk to banks without ever seeing your password.

Photo: “Java-greeting-app-source-code” by Віталій Крутько, CC0 1.0 (edited)

About this channel

#What this channel covers

Open banking is a simple idea with a lot of moving parts. Your bank holds data about your money; open banking lets you share some of it, or let another firm start a payment from your account, but only with your permission. The Basel Committee on Banking Supervision describes it as the sharing and leveraging of customer-permissioned data from banks with third-party developers and firms to build applications and services⁠^[1]. Start with what is open banking, then see the machinery in how banking APIs work.

#What is open finance, and how is it different from open banking?

Open finance is the same permission-based idea as open banking, stretched beyond payment accounts. Open banking covers the data and payments of bank and payment accounts; open finance would let you share data about other financial products too. The European Commission's 2023 proposal for a framework for financial data access covers customer data sharing in the financial sector beyond payment accounts, and customers would have the possibility but no obligation to share their data⁠^[2]. Start with what open banking is, then see how sharing works in practice in how banking APIs work.

#Rules differ from one region to the next

There is no single global open banking law. In Europe, the second Payment Services Directive has applied since 13 January 2018 and brought account information and payment initiation services under regulation⁠^[3]; read PSD2 explained. In the United States, the CFPB's 2024 data-rights rule is currently barred from enforcement by a court while the agency reconsiders it⁠^[4]; our guide to the CFPB 1033 rule dates each step. The UK publishes detailed figures: by mid-2026 its ecosystem had passed one billion open banking payments and 100 billion API calls⁠^[5].

#How to use these guides

Every number, date and rule on these pages links to its source, mostly a regulator, statute, court document or standards body, and every worked example is calculated with code. Nothing here recommends any app, bank or provider. If you want the practical side, read screen scraping vs APIs before you connect an app, and pay by bank explained before you use a pay-by-bank button. Short definitions live in the glossary entries for open banking, API and PSD2. Open banking also touches security and payments, so you will find links across channels.

Sources for this introduction (5)

Sources

Report on open banking and application programming interfaces (APIs) — Bank for International Settlements (Basel Committee on Banking Supervision), 2019 Primary
Framework for financial data access — European Commission — Directorate-General for Financial Stability, Financial Services and Capital Markets Union, 2023 Primary
Payment Services Directive (PSD2): Regulatory Technical Standards (RTS) enabling consumers to benefit from safer and more innovative electronic payments (MEMO/17/4961) — European Commission, 2017 Primary
Forcht Bank, NA et al. v. Consumer Financial Protection Bureau et al., No. 5:24-cv-00304, Document 90 (order granting preliminary injunction, 29 October 2025) — US District Court for the Eastern District of Kentucky (via Justia), 2025 Primary
Open Banking surpasses one billion payments and 100 billion API calls — Open Banking Limited, 2026 Primary

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