OPEN BANKING VS. CARD PAYMENTS: CAN PISPS DISRUPT THE CARD STACK?

Summary from the TLDR Crypto newsletter

Traditional card payments rely on a complex four-party model that routes transactions through acquirers, card schemes, and issuers, with fees distributed across each layer. Open banking proposes a simpler flow, where Payment Initiation Service Providers (PISPs) can initiate payments directly from a user's bank account with consent. While this could bypass card schemes and reshape the payment value chain, card networks still provide large-scale clearing and settlement, meaning open banking payments may ultimately replicate similar batch-settlement dynamics rather than fully replacing cards.