European banks have greatly improved their API availability for open banking payments, a report from Salt Edge has found.
The open banking solutions provider’s report, titled ‘State of open banking payments in Europe in 2021’, found a huge rise in API availability for open banking payments among nations from 2020 to 2021.
The study, which was based on testing 2,500 open banking APIs from 31 European countries, showed that Italy, Germany and Netherlands saw the most improvement in this area while the UK remained at the top.
Last year it was mostly a one-way communication between third-party providers and banks, where banks’ APIs would receive the API calls but not reply to them, but this changed in 2021, the report said.
In 2020 API availability in the UK was at 97 per cent, compared to 91.59 per cent in Portugal, 90.21 per cent in the Czech Republic, 89.72 per cent in Italy, 83.92 per cent in Germany and 82.87 per cent in Netherlands.
In 2021, this increased to 97.61 per cent in the UK, 96.83 per cent in the Czech Republic, 96.53 per cent in Portugal, 95.81 per cent in Austria, 95.41 per cent in Netherlands and 94.8 per cent in Belgium.
The report corresponds with the two-year anniversary of the launch of open banking in the UK, which mirrors the revised payment services directive (PSD2) in Europe. The technology mandates data-sharing between banks and third parties to benefit consumers.
Salt Edge has also found a great improvement in the quality of banks’ sandboxes, with the proportion of “useless” responses going from 46 per cent in 2020 to 22 per cent this year.
“While in 2020 open banking payments APIs were almost not functioning, in 2021 banks offer an ecosystem, although not ideal, but one upon which new services can be built,” Salt Edge said in a blog on its website.
“To help customers in adopting open banking-powered payments, it is critical to ensure a smooth and intuitive user journey.
“Yet, the current state of PSD2-enabled payments comes with various layers of complexity at each stage, to name a few: some banks request multiple redirects between the bank and third-party before a payment order is completed, PSU must go through other six to eight additional pages which add unnecessary friction, a relatively small number of EU banks supporting mobile App-2-App redirection, banks’ PSD2 APIs not reflecting the actual payment status, banks having delays in consent management resulting in errors and user frustration.”