Deutsche Bank and Mastercard partner to power merchant solutions with open banking

Deutsche Bank and Mastercard have formed a strategic partnership to advance open banking payments across Europe, enabling merchants to offer seamless pay-by-bank functionality to consumers.

The collaboration leverages Mastercard's open banking technology alongside Deutsche Bank's account infrastructure to enable consumers to pay for purchases directly from their bank accounts, bypassing traditional card networks. The pay-by-bank model offers merchants lower processing costs while providing consumers with a checkout option that requires no card details.

The partnership targets European markets where open banking regulations, including the EU's PSD2 directive, have created the regulatory framework for bank-initiated payments. Pay-by-bank has been gaining traction among merchants looking for alternatives to card payments, particularly for higher-value transactions where card interchange fees represent a meaningful cost.

Mastercard's involvement in open banking payments reflects its strategy of participating in all payment flows rather than limiting itself to card-based transactions. The company has invested in open banking capabilities through acquisitions and partnerships, positioning itself as an infrastructure provider for account-to-account payments as well as card payments.

Deutsche Bank brings its large European customer base and banking infrastructure to the partnership, providing the account connectivity needed for pay-by-bank services to function at scale. The bank's participation signals growing interest among major European banks in open banking as a commercial opportunity rather than purely a regulatory compliance obligation.

The partnership is expected to accelerate merchant adoption of pay-by-bank options across key European markets.