Open Banking
Open banking is a regulatory framework — established in Europe through the Payment Services Directive 2 (PSD2) and now evolving under PSD2 — that requires banks to open their payment and account infrastructure to authorised third-party providers through secure digital interfaces known as APIs (Application Programming Interfaces).
In practical terms, this means a property management company no longer needs to rely solely on its bank's own payment tools. Instead, it can use authorised third-party services to initiate payments directly from a tenant's bank account, receive real-time confirmation of payment, and access transaction data without manual reconciliation.
For real estate, open banking has transformed rent collection. Rather than waiting for tenants to set up standing orders or process card payments with 1.5–3% fees, a property company can initiate an account-to-account (A2A) transfer directly — with the tenant's authorisation — at a fraction of the cost. Settlement is typically instant thanks to the SEPA Instant Credit Transfer scheme, which became mandatory for all eurozone banks in October 2025.
Open banking adoption in European real estate is accelerating. Property companies that process recurring payments (rent, service charges, investor distributions) stand to benefit most, because the per-transaction cost savings compound with volume. A portfolio processing €500,000/year in rent can save €7,000–15,000 annually by switching from card payments to open banking initiation.