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The rapidly expanding utility of open banking for instant funding came into sharp relief early Thursday with announcements from payments processors Nuvei Corp. and Circle Internet Financial Corp.
Montreal-based Nuvei, which has been cultivating its stake in the U.S. gaming market, said consumers can now move money instantly from their bank accounts to digital wallets, payment cards, or other accounts. The company is working with open-banking firm Plaid Inc. to verify bank accounts for the transfers. The new capability, called Verified Withdrawals, adds to an existing feature allowing gamblers to deposit winnings instantly into their bank accounts.
The feature relies on technology from Mazooma Technical Services Inc., a Toronto-based payments firm Nuvei acquired in August that specializes in the gaming market.
Verified Withdrawals’ verification process through Plaid includes know-your-customer procedures before the withdrawal and automatically ties players to their bank-account data, according to Nuvei.
Nuvei has been moving rapidly into sports betting in recent months. In May, it said a subsidiary had won approval from the Michigan Gaming Control Board to offer processing to licensed and regulated operators of online sports betting in that state. Michigan only in January had legalized online wagering on sports. That move brought to 10 the number of states where Nuvei had gained approval to process sports wagers.
In other news involving Plaid, cryptocurrency platform Circle Internet Financial Inc. announced Thursday an integration with the company to enable account verification for automated clearing house transfers. Through the integration, which is already in operation, users of services such as Linus Financial Inc. and Lemonade Finance can link bank accounts directly with Circle without divulging account details, Boston-based Circle said.
The new capability relies on the Payments and Payouts application programming interfaces from Circle to settle ACH payments in the USD Coin stablecoin. Likewise, the service converts payouts from Circle accounts into dollar-denominated ACH transfers.
“ACH payments are increasingly critical as digital finance becomes the ‘new normal.’ However, historical processes and infrastructure don’t properly support the increase in money flowing online between accounts,” said Paul Williamson, head of revenue and partnerships at Plaid, in a statement. “Innovative companies like Circle offer easier ACH processing combined with the power of Plaid’s instant Auth and account verification for better money-movement experiences.”
The heightened importance of open-banking networks was underscored earlier this year when payments giant Visa Inc. agreed to acquire Tink AB, a Stockholm-based company with connections to 3,400 financial institutions throughout Europe. Visa in January had abandoned a $5.3-billion bid to acquire San Francisco-based Plaid in the face of an antitrust suit filed by the U.S. Department of Justice. Also last year, Mastercard acquired Finicity Corp., a Plaid rival, in an $825-million deal.
