What does coverage mean and why is it important?
At its most basic level, coverage is the proportion of your existing and potential future customers that you can collect payments from, and potentially pay out to, using a particular provider. It’s critical to be able to serve as much of your current and future customer base as possible with your payment experience.
But open banking coverage isn’t as simple as it first appears. Not all coverage is created equal, and different providers measure coverage in different ways, making it tricky to directly compare two providers.
For a true reflection of coverage, there are four angles to consider*:
Type of accounts
The type of coverage
The quality of coverage
*If you want to send money to customers, as well as collecting payments, then use this same framework for payouts and withdrawals.
How would you measure coverage? The number of people within a market that can use the payment method? In the case of open banking payments, that is the ‘banked population’, and it gives a true reflection of the breadth of coverage you can hope for in a given country. Some providers use the number of banks or even the number of bank branches. While thousands of bank branches sounds like a big number, it may only represent a fraction of the banked population.
What percentage of the banked population does your service cover in [country], and how do you plan on increasing it?
Personal accounts or business accounts
If access to businesses is important to your brand, then make sure you know the coverage for business accounts, too. For many providers it’s often lower than with personal accounts.
What is your coverage of business accounts in [country]?
The type of coverage
Adding open banking to your website or app is often a choice between application programming interfaces (APIs) and screen scraping. These are the two main ways your provider can connect to the banks.
APIs are a secure way to connect. Payers authenticate their payment directly with the bank using strong customer authentication (SCA), and APIs typically enable app-to-app user journeys on mobile phones. In the UK and Europe, open banking APIs are highly regulated under PSD2 legislation for added security.
Screen scraping, on the other hand, involves a customer sharing their bank account login details with the open banking provider, which stores them unencrypted on the server doing the screen scraping.
With screen scraping, there’s a much higher risk that confidential customer information can be leaked, and the very process is often a violation of a bank’s terms and conditions. From a business’ point of view, screen scraping is time consuming to maintain, as even the smallest update to a bank webpage can completely disrupt or outright break the user experience.
Providers that use screen scraping might say it performs better than APIs. And it’s true that, in some countries, API-based open banking journeys are still evolving and haven’t yet reached their full potential. But it’s important to future-proof your payment collection. Screen scraping has been deemed unsafe by regulators across Europe, and plans are in place to eventually ban it while the API approach is heavily backed by regulators.
What percentage of your coverage is based on bank APIs vs screen scraping?
The quality of coverage
While APIs provide a better experience for all parties, there can still be a big gulf in the quality of bank APIs. A provider may be connected to a bank through an API, but that doesn’t mean they are pushing much traffic through it or testing it.
For markets that are vital to your business’ operations, consider a provider that has a significant testing regime in those areas. They should be processing high volumes of requests through the relevant APIs to understand bugs and edge cases.
Providers should also be sharing findings directly with the banks to help them improve API quality and reliability, to the benefit of businesses and their customers. Under PSD2 rules, banks are required to fix technical issues, so an active feedback process will benefit your business.
How much traffic do you have going through your connectors, and what is your testing process when integrating with APIs?
TrueLayer covers more than 95% of bank accounts in major European markets – for example, 98% in the UK, 99% in Spain and 95% in Ireland. Our coverage is constantly growing across Europe.
We are also an unrestricted Accredited Data Recipient (ADR) in Australia. The open banking landscape is more nascent in Australia, but we’re leading open banking conversations there with regulators, banks and fintechs.
TrueLayer’s coverage in the UK and Europe is 100% API-based, meaning we don’t use screen scraping. At TrueLayer, we invest a huge amount of time and resources in testing bank APIs, debugging and sharing our findings with banks to help them fix issues and improve their API quality, while minimising the impact for our clients.