Open banking and alternative payments

Abstract

This chapter introduces the foundational blocks of open banking and why PSD2 was instrumental in creating the phenomenon, with a worldwide overview of adoption and practical strategic advice. It covers alternative payment methods (e.g. digital wallets, money remittance, delayed payments, virtual assets) and provide real-life examples. It also explains the concepts of money, eMoney, and Central Bank Digital Currency (CBDC), and introduces the difference between centralised and decentralised payment infrastructures, covering the concepts of Distributed Ledger Technology (DLT) and blockchain, and how decentralised authorisation, clearing, and settlement function. It will also introduce the drivers for change, worldwide market statistics and projections, the role of Big Tech and technology, how the Metaverse applies to payments, and the differences between Web 2.0 and Web 3.0.