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In a move to streamline money movement and financial account openings for consumers, open-banking network MX Technologies Inc. on Tuesday unveiled what it calls MXapi Processor Tokens.
MX enables fintechs to access consumer financial data, and helps its clients turn raw data into usable form. Token-based application programming interfaces (APIs) can provide account ownership data, transaction history, account balance data, and more for the processor to move money for the consumer, according to Lehi, Utah-based MX.
The new service will speed up secure money movements and account openings, MX says. MXapi Processor Tokens also will remove the need for clients to store sensitive user data, access the data needed for identification and know-your-customer processes, deliver real-time balances, and enhance fraud-control analysis, the company says.
“In a world where protecting against data breaches and other financial fraud is paramount, processor tokens enable our clients to protect their consumers,” Corinne Bartow, MX vice president of fintech partnerships, said in a statement. “Whether moving money or opening an account, they no longer need to store the user’s verified account data or create new connections each time data is necessary to verify information. This is a big deal, especially in the fintech multiparty ecosystem.”
David Whitcomb, vice president of product at MX, tells Digital Transactions News the tokens are unlike tokens used for Visa or Mastercard card transactions in which the card number is converted into data useless to fraudsters. “Our processor tokens at this time allow processors to get data from MX via APIs by using the token as a method of authentication,” he says by email. “Tokens by themselves are useless, they do not mean anything unless they are used with the client credentials to be authenticated before accessing data.”
The first payment processor to use MXapi Processor Tokens is Cedar Falls, Iowa-based Moov Financial Inc. “MX has created a technology offering that further enhances Moov’s ability to reduce client registration friction and increase security for our mutual customers,” Moov chief technology officer Joel Tosi said in a statement.
Open banking has taken on increased significance in recent years as more consumers rely on fintech apps to perform financial chores, including money movement, that require access to bank accounts to verify funds and account ownership.
One of the largest providers of open-banking technology, MX last month announced enhancements to its partner network. The network provides links to 13,000 financial institutions and fintechs. Whitcomb says MX’s goal is for 25 processors to be using the token service for payments and Know Your Customer functions by year’s end.
