FAQ

Open Banking is the standardised regulation that empowers everyone of us to control our own financial data. We have the option to make it easier, faster, and cheaper to receive the financial goods and services we desire by sharing our banking information with trusted and reputable third parties.

PSD2 is a European Union regulation that establishes criteria for banks and companies in the financial services industry to enhance consumer protection, increase payment safety and security, and reduce the costs of payment services.

Even if your company has not yet been regulated, you can still use Open Banking technologies based on our Gateway solution. Exthand’s Gateway uses DigiTeal licensing to connect to banks and get transactions, balances, and initiate payments. After the completion of a KYB process using the Gateway is a straightforward and a simple task.

There are two ways you can connect to a bank:

• The first option is to use the Open Banking-related APIs. You must be regulated by your NCA before becoming a TPP (Third Party Provider) with access to Account Information and/or Payment Initiation services. Once TPP, you may access APIs in the name of your customers (PSU) to retrieve balances, statements, and so forth.
• The second method is to use direct bank API (Premium API, Institutional API, Private API, etc.). To have access to such APIs, you must collaborate with each bank. Once the partnership has been established, you can access the API using your customer’s certificate. 

Premium APIs provide additional services and functions than Open Banking APIs, however they may also incur a fee, whereas Open Banking APIs are free. At Exthand, we support connectivity to both types of APIs.

No. If you wish to connect to Open Banking APIs, you must be regulated by your NCA (National Competent Authority) and get, in Europe for example, the licences 7 and/or 8.To connect to Premium API’s, you will need a certificate issued by the bank you are connecting to. We already have lots of deals with banks in place so let’s talk about this on sales ( a) exthand.com.

At Exthand, our roadmap for connectors delivery is customer driven. Ask us for new bank connectors and we will deliver based on a mutually agreed planning. 

Using our Open Banking API is a few steps process. You have to: 

• Create an account in the Developer Portal: https://developer.bankingsdk.com  
• Read – yes, read – the documentation here: https://docs.exthand.com 
• Contact us and we will proceed to a first technical onboarding with your tech team. This is the fastest way to get on track. 

Our Open Banking solution is released as Docker container. Docker© is a well-known technology for managing containers in Cloud systems. We tested Docker container compatibility with Microsoft Azure, Amazon Web Services (AWS), Google Cloud, and the IBM Financial Services Cloud. 

If you look at the sample code on GitHub, you can be up and running with our sandbox in a matter of hours. 

A complete solution using your own Open Banking service Docker instance, storing data on your servers, using actual certificates, and dealing with real users: 5 days on average. No more. We also offer assistance throughout the integration process. 

Your eIDAS certificates (in case you are a regulated TPP) or your bank certificates are stored in your Cloud system. We never manage, store, or collect your or your customer’s certificates.  

Your certificates, your rules! 😉​

Since 2018, Open Banking structures have been deployed around the world. Their degree of maturity varies as some territories offer standardised APIs (like Europe with the PSD2 directive) while others require individualised agreements and connections between stakeholders and banks.

Exthand’s documentation covers all of the areas served as well as the banks that use their API. Open Banking Map is a website that provides an interactive map with reference frameworks, use cases, and shortcuts to official Open Banking documentation country by country.

An account-to-account (A2A) funds transfer is a direct transfer of money between two bank accounts that bypasses middlemen such as credit card networks or payment service providers

Account-to-account (A2A) payments refer to a variety of ways for transferring money directly between two bank accounts without the need of agents. Here are the major categories:

1. Bank transfer (SEPA, SWIFT)

Bank transfers are direct transfers between accounts via national or international banking networks.  

SEPA: Used in Europe, it allows for rapid and economical transactions in euros.

SWIFT: For international payments in different currencies, often slower and more expensive.  

2. Direct debit

This method authorises a company or supplier to withdraw funds directly from the customer’s bank account, typically for recurring payments such as invoices or subscriptions.  

3. Instant payment

These payments are made in real time, typically using systems like SEPA Instant Transfer in Europe or Faster Payments in the United Kingdom. They are available 24/7.

4. Mobile payment linked to the bank account

Mobile services, for example, allow payments between bank accounts using a mobile application, which is frequently used with a phone number or an e-mail address.  

5. P2P payment (peer-to-peer)

These payments allow money to be transferred between individuals via banking applications or financial services, directly linked to users’ bank accounts.  

6. Payments based on banking APIs (Open Banking)

Third-party systems using Open Banking can start A2A payments after receiving consumer authorization, providing an alternative to credit card payments. This is a secure and cost-effective way.

These A2A payment methods are popular because they are faster, more secure, and less expensive than traditional payments using intermediaries.

A traditional bank transfer requires you to connect to an online banking service and manually enter the beneficiary information. Also, at the time of payment, it often requires additional verification (via a card reader or other authentication method, for example). In contrast, an Open Banking transfer obtains this information automatically, making the procedure speedier and less prone to errors. Open Banking can also produce a payment link or QR code, prompting the user to pay fast and conveniently.

An Open Banking payment is based on a direct transfer of funds between the customer’s bank account to that of the merchant or beneficiary, bypassing credit card networks. This method employs secure banking APIs and complies to data security and strong authentication requirements.  

Here are the 4 main stages of an Open Banking payment:

1. Payment initiation

The client chooses Open Banking as a payment option on a merchant’s website or application.  

They choose a bank from the list.  

2. Customer authentication

Customers are redirected to their bank’s secure interface. 

They use their bank login to identify themselves and go through a rigorous authentication procedure (SMS code, fingerprint, face recognition, etc.).  

3. Confirmation and authorisation

The customer reviews the payment details (amount, recipient) and gives their explicit consent to the transaction.  

Once verified, the payment is made immediately from the customer’s bank. 

4. Payment execution

The funds are transferred immediately or within a short timeframe, depending on the type of payment (instant or standard) and the bank’s ability to support instant or non-instant payments.

The merchant or beneficiary receives instant confirmation of the transaction.

If Open Banking is used in the same way as a standard transfer, it can take 24 to 48 hours to complete a payment. Instant payments allow you to receive funds in as little as 10 seconds.  

Open Banking provides significant benefits for a wide range of use cases (e-commerce sites, marketplaces, electronic invoicing, digital subscriptions, loyalty systems, kitty and wallet services, accounting, ERP or HR software, debt collection, and so on). 

→ Confidentiality:

The client does not need to disclose the details of their bank account. The transaction is authenticated via rigorous authentication with their bank, ensuring a safe payment.  

→ Security:

The party who initiated the transfer is not required to manually input the beneficiary’s IBAN. All required information is pre-filled, eliminating the possibility of error and fraud.  

→ Simplicity:

The payment process is quick and simple, taking only a few clicks without leaving the original platform.  

→ Productivity:

Transactional data (amount, order number, etc.) is automatically captured and supplemented, making accounting management and administrative activities more efficient. 

→ Cost reduction:

Open Banking payments involve less intermediaries, lowering transaction costs and saving firms and merchants money on their financial operations.

Once received by the payer’s bank, the transfer order cannot be canceled. Unlike conventional payment methods (such as card payments), which might take several working days to complete, an Open Banking payment is completed immediately in the case of an instant payment or within 48 hours at most in the case of a standard payment.

Exthand provides a simple, safe, and optimised payment experience, eliminating friction while increasing transaction security and speed for consumers at a competitive market price.  

Exthand has designed its API to keep all data in a Docker container.This docker may be put on either Exthand’s or the client’s infrastructure. This highly secure solution provides unparalleled flexibility and allows companies to change their infrastructure without going through the Exthand API integration procedure again.

Exthand provides outstanding transaction speed, a simpler payment method, and increased data safety, making it a top choice for companies and individuals. Furthermore, our technical staff provides tailored, immediate assistance to all Exthand customers and partners prior to, during, and after the integration period. 

Exthand stands out for its technical simplicity, which makes integration easier. Additionally, we focus on the user experience by reducing the amount of user interfaces.

There are two ways you can connect to a bank:

• The first option is to use the Open Banking-related APIs. You must be regulated by your NCA before becoming a TPP (Third Party Provider) with access to Account Information and/or Payment Initiation services. Once TPP, you may access APIs in the name of your customers (PSU) to retrieve balances, statements, and so forth.
• The second method is to use direct bank API (Premium API, Institutional API, Private API, etc.). To have access to such APIs, you must collaborate with each bank. Once the partnership has been established, you can access the API using your customer’s certificate. 

Premium APIs provide additional services and functions than Open Banking APIs, however they may also incur a fee, whereas Open Banking APIs are free. At Exthand, we support connectivity to both types of APIs.

Our Open Banking solution is released as Docker container. Docker© is a well-known technology for managing containers in Cloud systems. We tested Docker container compatibility with Microsoft Azure, Amazon Web Services (AWS), Google Cloud, and the IBM Financial Services Cloud.