How Open Banking, AI, and advanced tech secure instant payments | Insights from Yaspa

James Neville, CEO and Co-Founder of Yaspa, elaborates on the security of instant payments and the impact of Open Banking, AI, and advanced tech.

As payments become faster and more embedded into our lives, the emphasis on trust, transparency, and security has never been more acute. Fraud, friction, and slow verification are among the issues that traditional payment systems have long grappled with, as they erode consumer confidence and cost businesses money. Instant payments, by definition, solve some of these issues but also present a varied set of challenges. We see everything from sophisticated refund scams circulating on social media to high-profile, authorised push payment fraud losses. Beyond retail, industries such as online gambling constantly face threats from identity fraud and account takeovers. Traditional know your customer (KYC) processes can be slow and costly, causing nearly half of banks globally to lose clients due to clunky onboarding. False declines, where a genuine customer’s payment is wrongly rejected, can cost merchants more than actual fraud. These issues highlight a critical need for robust, intelligent payment verification systems.

A powerful combination to the rescue

A powerful combination is emerging to tackle these issues at their root: Open Banking and AI. Open Banking provides the foundation by enabling secure, consent-driven data sharing. It removes reliance on cards, along with card fraud costs and chargebacks. Biometric authentication and real-time bank account verification can be directly embedded into the payment flow, speeding up KYC and reducing onboarding friction.

AI brings this secure data to life. Its ability to analyse financial data, detect fraud, and optimise payment processing will reshape the future of payments. Modern AI systems can sift through transaction data in real time, detecting unusual patterns far more effectively than manual checks. Machine learning (ML) models learn ‘normal’ behaviour and flag anomalies, like unusual, high-value transfers, unfamiliar logins, or repeat chargeback requests. These self-learning systems continuously adapt to emerging fraud tactics.

Empowerment beyond transactions

At Yaspa, we have developed Intelligent Payments, combining Pay by Bank transactions, AI-powered verification, and real-time risk assessment into a seamless, secure experience. This solution tackles several critical pain points simultaneously, enabling compliance, commercial, and payment teams to work from a unified view of the user. It empowers partners to take payments beyond mere transactions, incorporating identity, intent, and financial context, including the ability to flag activity that indicates potentially risky behaviour (e.g., from problem gamblers).

Intelligent Payments builds on instant payments in the following ways:

• Enhanced fraud detection: AI-driven real-time detection monitors transactions for patterns (i.e., unusually high transaction velocities or mismatches between user location and payment method). These systems score risk, enabling quick, proportionate action. By analysing data across a user’s spending history, advanced systems can provide pan-retailer or pan-operator insights that significantly enhance fraud detection, via a customisable dashboard offering a snapshot of selected, relevant data.
• Streamlined KYC and ID verification: AI-driven verification can confirm IDs in seconds, replacing cumbersome, high-friction ID document checks. AI can instantly cross-check data against watchlists. In an Open Banking environment, AI plays a crucial role in digital ID verification, detecting anomalies and flagging potential fraud based on user behaviour and device details throughout the account lifecycle. Yaspa’s verification solutions take account verification to the next level, with easy-to-understand and configure data feeds and risk scoring.
• Secure Pay by Bank transactions: Pay by Bank offers inherent authentication, as transactions are authenticated directly through a customer’s banking app using biometrics or secure credentials. This provides Strong Customer Authentication (SCA), required by regulations like PSD2, significantly reducing impersonation risks. Crucially, unlike card transactions, Pay by Bank payments eliminate chargebacks, which is a key vector for refund fraud.
• Optimised transaction processing: AI optimises how payments are processed and authorised, making smarter decisions in split seconds. AI-driven decision engines analyse a wide range of data points to decide the best way to handle a transaction, filtering suspicious ones and reducing false declines.

Beyond fraud, this combination helps businesses understand their users better. By highlighting signs of financial stress or instability based on consented bank data, companies can respond in a more supportive, targeted way.

This is particularly powerful in sectors like online gambling, where spotting financial red flags at the deposit stage enables earlier intervention to prevent harm and promote safer play. Yaspa’s work developing player protection tools, supported by an Innovate UK grant, is a testament to this potential. This data-informed approach, always respecting consent and privacy, builds trust and moves us towards a more human-centred financial system.

A step change in payments intelligence

The future of payments is inextricably linked with AI and Open Banking. To fully realise the benefits of instant payments, businesses must embrace advanced fraud prevention strategies pioneered in high-risk environments such as online gambling. Technologies like Yaspa’s Intelligent Payments provide the battle-tested tools necessary to counter evolving fraud threats, protect businesses, and deliver secure, seamless customer experiences. It’s about being proactive, not reactive.

The convergence of AI and Open Banking is driving a new wave of financial innovation. It promises an ecosystem where transactions are frictionless, fraud is mostly pre-empted, and businesses can harness advanced AI tools via their Open Banking platforms. This isn’t just a technical upgrade; it’s a step towards a more responsible and intelligent payments future.

This editorial piece was first published in The Paypers' Account-to-Account Payments Report 2025, which features insights into global trends, key players, partnerships, and the next phase of the A2A evolution. Access the full report to understand where the A2A payments ecosystem stands today and what’s next.

About the author

James Neville is CEO and Co-Founder of Yaspa, which was one of the first companies in the UK to become a licenced provider of payment and identity services via Open Banking. James previously held senior operational roles at brands such as Just Eat, Ascential, and Sportingbet, and is one of the industry’s leading experts in payments and identity verification.

 

 

About Yaspa

Yaspa is an award-winning fintech that delivers personal intelligence through instant payments. Founded in 2017 by a former Worldpay CTO, Yaspa blends Open Banking and AI to provide Intelligent Payments: real-time bank payments (Pay by Bank) combined with verified customer insights, as well as a full suite of payment and account verification services. Yaspa operates across the UK and Europe and is regulated by the UK's Financial Conduct Authority.