Third party providers: Open Banking and the Payment Services Directive

Open Banking is the name used by the financial industry to talk about new services in which current account holders may choose to share their financial information with, and make payments to, banks and other authorised organisations.

Open Banking was introduced by the UK’s Competition and Markets Authority (CMA) to bring more competition and innovation to the financial services industry. It works using a secure system to let you register with other banks or authorised organisations (known as third party providers, or TPPs) and tell your bank to let them see and use your current account details.

It's up to you if you want to share your data. Open Banking gives the opportunity to share your information, but only if you expressly give your permission.

The Payment Service Directive (PSD) is European law, which is translated into UK law as the Payment Services Regulation. This law tells banks and other providers how they have to process payments and other services linked to providing payment services. The PSD was updated, and one of the changes introduced similar services to those contained in the UK’s Open Banking rules.

The PSD changes mean that TPPs can (with your express permission) see information about accounts and make payments on your behalf. This applies to any payment account you can use online (such as current accounts, credit cards and some savings accounts). Some TPPs may ask for your Internet Banking details so that they can see and use your account details, as they can’t yet use the methods introduced for Open Banking for certain accounts. The services offered by TPPs and the way they access information is developing. Soon the secure system developed for Open Banking will be used more widely.

Third party providers’ services

Following a number of changes to the law and regulation you can now give certain permitted companies (third party providers or TPPs) access to some of your accounts, so they can provide services such as:

  • Account aggregation: see your accounts with different providers all in one place in a mobile app or online. Banks, building societies and price comparison websites will be some of the companies providing this type of service.
  • Payment initiation: online payments can be made on your behalf, as an alternative to using your debit or credit card. Some online retailers will be providing this service.

TPPs can only access your information and provide these types of services if you’re registered for Internet Banking and give your consent. If you share your Internet Banking details the TPP will be able to see information about other accounts you can see in Internet Banking.

Giving your consent

Before you give consent for any third party provider (TPP) to access your accounts, it’s important that you understand the services they’re providing and how they’ll use your information, including if they’ll be sharing it with anyone. You should also take reasonable steps to ensure that the company is legitimate. See the ‘Be safe’ tab for more information.

To obtain your consent to access your accounts, TPPs can:

  • Redirect you to Cater Allen, where we’ll take you through a detailed online authorisation process. If you are familiar with the way to log on to our Internet Banking, then this process will be very similar. A One Time Passcode (OTP) will be required to complete the consent process. This will be sent to the OTP mobile number registered with us. Remember you should never share an OTP with anyone, not even a member of Cater Allen staff.
  • Some TPPs may not be able to access your accounts this way, so they may ask you to share your Internet Banking log on details with them. Please note, that even if you share your Internet Banking log on details with these particular TPPs, you should never share an OTP with anyone, not even a member of Cater Allen staff.

Before sharing your details with a TPP you should take reasonable steps to check the TPP is legitimate. In all cases, be vigilant and check the transactions on your account regularly. Once the TPP has your consent and has obtained access to your information, we can’t control how it will be used. See the ‘Be safe’ tab for more information.

Remember you can withdraw and manage your account information consents at any time.

For payment initiation services, how you give your consent depends on the kind of payment you're making:

  • Single immediate payments: you’ll have to give your consent every time a TPP initiates a payment on your behalf. The payments will normally come out of your account straightaway, although they can take longer. Once you’ve authorised a payment, we won’t be able to stop it. The payments initiated by these companies are Faster Payments, these are taken directly from your account using your account details and not your card.
  • Standing orders: you’ll need to give your consent during the set up of the standing order. Once the consent is given, your scheduled payment(s) will work as normal.
  • Future-dated payments: you’ll need to give your consent every time you wish to set up a future-dated payment. Once the consent is given, your scheduled payment will work as normal.

Be safe

Know your rights

  • Third party providers (TPPs) can only provide these services if you agree and they can only access the accounts you have given your consent for.
  • TPPs have to provide key information about their services. This should include what data they will have access to and how they will use it or share it. They will also have to tell you what to do if you’re not happy with the service.
  • You can withdraw and manage your consents at any time.
  • If you’ve provided any of your log on details to a TPP you’ll need to tell them to stop using them to access your information. You may want to order new details to be confident that they can’t be used by anyone you don’t want to access your information.
  • We may refuse to give access to a TPP, for example, if we believe there is a risk of fraud.

Take responsibility

  • Take reasonable steps to check a TPP is legitimate. Ask them for more details, for example who they are regulated by. UK based TPPs must be registered with the Financial Conduct Authority (FCA), with the exception of those who started operating before 12 January 2016. This is however a transitional provision, from the 14 September 2019 all UK based TPPs must be registered with the Financial Conduct Authority (FCA). You can check the FCA register at: fca.org.uk/.
  • Be alert. You should be vigilant to fraud when using these services. If there is a reason to suspect that the TPP is not who they claim to be, don’t disclose any information. A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Don’t give out personal or financial details unless it is to use a service that you have signed up to, and you’re sure that the request for your information is directly related.
  • Understand what you are agreeing to, by making sure you read the terms and conditions of the TPP carefully.
  • Regularly check your accounts and if you notice any activity you don’t recognise, talk to us.
  • If you notice a transaction that you didn’t authorise or think you have been a victim of fraud you should let us know immediately by calling us on 0800 092 3300 (international number +44 (0) 1142282407).
  • For more information about your responsibilities and keeping your account safe take a look at the Terms and Conditions of your account, which you can find on the product page, or find out more on our keeping yourself secure.

Understand the consequences

  • Once the TPP has your consent and has obtained your information, they’ll be responsible for the security of that data. We can’t control how it will be used.
  • Once you have authorised a TPP to make a payment, you may not be able to stop it.

Keep safe from fraud

  • Never share a Cater Allen One Time Passcode (OTP) with anyone, not even with a member of Cater Allen staff.
  • Never download software or let anyone log on to your computer or devices remotely during or after a cold call.
  • Never enter your Internet Banking details after clicking on a link in an email or text message.
  • For more information on how to protect yourself see our keeping yourself secure.

Find out more

For more information you may want to visit:

The Open Banking and the Financial Conduct Authority websites.

Information for TPPs

If you’re a TPP providing account information or payment initiation services and want to read more about how to use/access our APIs, you can find the technical specifications on our developer portal.