Ensuring customer payment security and proper data storage has become a major strain for businesses following the rapid growth facilitated by online payments. Compliance with data protection regulations remains an ongoing challenge.
UK businesses must adhere to the Data Protection Act 2018, which aligns with the GDPR. A recent study indicates that compliance can cost enterprises around $70 million annually.
Open banking utilizes secure APIs allowing third-party connections to financial data, which help in processing payments without the need for collecting sensitive personal information, easing compliance burdens.
The adoption of open banking is facilitated by mandates like the Second Payment Service Directive (PSD2), ensuring a standardized and secure approach to managing financial transactions.
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