Stripe, Plaid & The Case For More Dynamic Data
Last week, Stripe launched its Financial Connections product, entering an already crowded market for account linking products and piling pressure on trailblazers like Plaid and Truelayer. On the back of Klarna’s recently announced Kosma initiative, Stripe’s entrance is yet another accelerant to the commoditization of the Open Banking ecosystem. It also raises the question of whether these players truly believe that their recent launches will be standalone businesses or if they expect them to act more as loss leaders for their other services (account linking infrastructure could very well be an exciting complement to Stripe and Klarna merchant services).
While these platforms consider new ways to differentiate, the team at Fidel API has been building such an innovation for years. Instead of building a better Open Banking mousetrap, Fidel API has been building a means for developers to build on an entirely different and uniquely powerful dataset.
While Open Banking players source bank account data via a mix of APIs and screen scraping, the Fidel API platform is built on real-time, granular transaction data pushed via direct connections and partnerships with our global card network partners: Visa, Mastercard and American Express. Let’s take a look at how card network data can be leveraged to build even more engaging and personalized experiences.
Card Data and Account Data: Two Different Coins
Open Banking players provide access to bank account data if and when consumers are willing to share their sacred bank credentials. The data is static as the bank prioritizes your total assets and liabilities versus the individual transaction records that tell the story of a consumer’s evolving financial standing.
Let’s say you want to use bank data to build an experience that a bank prioritizes: e.g. underwriting or opening an account. Well, great! You’re on the right track. However, beyond that, bank data is not useful for building contextualized user experiences capable of generating meaningful and ongoing engagement.
Getting Granular With Card Data
Fidel API works closely with our global card network partners, thus providing a secure, consent-based means to build with very different data. The datasets that our network partners prioritize are hyper-dynamic, the messaging is real-time and the data fields are incredibly rich and granular. This messaging helps the networks fulfill their role in the payment ecosystem - namely to process transactions as fast and with the lowest rate of fraud possible in order to provide a seamless experience for cardholders at checkout. It’s also well-suited for building event-driven, programmable experiences - and that’s the fundamental difference that Open Banking can’t compete with.
To continue the above logic, if you are a developer and want to build dynamic experiences that engage and drive value to users at the moment they make a purchase, read on.
Here are the questions you should be asking…
Would my user experience benefit from real-time or static data?
- Fidel API: Each transaction message is pushed via webhook at the moment a purchase occurs, allowing you to build solutions that engage users almost instantly.
- Open Banking: Batch transaction messages are typically pulled on a 12, 24, or 48-hour basis - unless you pay for the privilege of more frequent batch pulls or encourage a user to continuously ‘pull down’ to refresh their app.
Would my user experience benefit from deep, granular transaction messaging or surface-level data?
- Fidel API: Receive dozens of valuable data fields, cleansed and enriched to an industry-leading standard.
- Open Banking: Access slim data files, standardized to the level possible when sourced from thousands of disparate banks.
Do I care about the uptime and fidelity of direct data connections or can I live with screen scraping, unstable bank connections and gaps in coverage?
- Fidel API: Is built on top of direct integrations with the card networks, reinforced by formal contracts with those entities and designed with user consent at its core.
- Open Banking: Open Banking platforms are, at best, built on top of direct API connections to a myriad of financial institutions. At worst, these platforms are built on top of screen scraping products that are governed by opaque data privacy controls. Both sources can lead to inconsistencies, gaps in coverage for certain institutions or other unforeseen challenges.
Would my users prefer to enroll by sharing their readily available 16-digit Card PAN or would they prefer to give up their sensitive bank account credentials?
- Fidel API: Users enter their 16-digit PAN and expiration date, which is instantly tokenized and active. The platform also offers identity verification methods that the team at Fidel API is constantly investing in.
- Open Banking: Users enter their bank login and password, requiring re-enrollment each time a password is changed. Certain platforms also require that a user cede control of their bank account with the provision of their credentials.
As you can see, based on your choice of partner as a developer, you can end up with very different products and distinctly different user experiences.
If the above sounds compelling to you, Fidel API is ready to assist. Fidel API offers issuer-agnostic products to enable you to create new value and transform the way users and merchants interact.
Discover the potential of Fidel API here.