Open Banking in Romania: Regulation, Adoption, Integration

Open banking is a fast-growing trend gaining traction worldwide. It’s already well-established in Europe, especially in the UK. But how evenly is this adoption spreading across the region?

In this article, we focus on Romania, a key Central European country, and explore the state of open banking there - its infrastructure, opportunities, adoption levels, and how to integrate open banking in Romania.

What Is Open Banking? Quick Recap

Open banking is a system where banks and financial institutions, with the approval of their customers, share data with authorised third-party providers (TPPs), often fintech firms.

This allows individuals to grant apps or companies access to their financial details. The data is shared through secure, regulated application programming interfaces (APIs).

The third-party providers use the data to develop improved financial products and services. Examples of open banking fuelled account-to-account (A2A) payments – often referred to as pay-by-bank – and budgeting apps that consolidate information from various bank accounts.

Benefits of Open Banking Payments & Data

An open banking payment gateway has numerous benefits over traditional payment methods. For example:

• Lower costs: As no expensive card networks are involved in open banking transactions (they happen from account to account), they are cheaper for merchants.
• Fast payments: Again, with no intermediaries, open banking payments are instant.
• No chargebacks: Without card networks, there are no mechanisms for chargebacks. Hence, there is no chargeback fraud.
• Superior UX: Customers don’t manually enter lengthy card details in open banking payments. Instead, they authorise payments via their trusted banking app. This leads to smoother UX and less cart abandonment.
• Customer insights: AIS providers can use open banking data to offer actionable insights. For example, merchants can use open banking tools to identify high-value clients and create targeted campaigns.

Open Banking Regulation in Romania: PSD2

PSD2, the Payment Services Directive 2, started open banking in Europe by requiring banks and account providers to share data with third-party providers.

Enacted by the European Commission in 2018, PSD2 marks the beginning of regulated open banking in the European Union. The Romanian banking sector, being part of the EU, is also mandated to share data via APIs.

To obtain customer data from banks, TPPs must obtain the following license:

• Payment Initiation Service Providers (PISPs): This would allow them to initiate payments on behalf of customers. Think about automated investments or account-to-account payments.
• Account Information Service Providers (AISPs): This would allow them to gather and present a read-only user’s account and transaction data from multiple banks in one place. Think of budgeting tools or risk assessment solutions.

This data-sharing ends the long-standing control that banks had over customer information. While banks are required to share this data, they must also adhere to strict regulations to protect customer security and privacy.

In terms of security, PSD2 introduced Strong Customer Authentication (SCA) for accessing payment accounts and making online payments. This requires users to provide at least two of the following: something they know (like a password), something they have (such as a card or phone), and something they are (biometrics).

How Popular Is Open Banking in Romania?

Findings by Juniper Research indicate that open banking services currently have 11 million users in Central and Eastern Europe. This number is projected to surpass 50 million by 2027.

With its 19 million population, Romania has one of the biggest markets in the CEE region. Yet its banked population only amounts to 66% (as of 2022, according to Statista), leaving still a sizable potential market of 12 million.

There are currently 15 bank & account providers in Romania with 52 bank APIs available within the Romanian banking sector, according to Open Banking Tracker as of August 2024. Yet there are not as many third-party providers.

“We now have two providers licensed by the National Bank of Romania and a few banks that have developed such services [AIS and PIS],” said Raluca Micu, Head of Payments Oversight at the National Bank of Romania in an interview with BR Business Review in 2023.

“Still, we hope to see an evolution in the Open Banking services adoption shortly. Recently, the European Commission launched a third Directive on payment services, aiming to promote providers that offer online banking services and to continue efforts in this regard,” she added.

Integrate Open Banking in Romania with Noda

Noda offers an open banking payment gateway in Romania. With our advanced Open Banking API, online merchants can easily integrate direct bank payments, offering their customers a seamless and secure payment experience with lower fees.

​​Noda is a global open banking provider that assists online merchants with end-user KYC, payment processing, LTV forecasting and UX optimisation. Our latest feature, Know Your Whales (KYW) offers actionable user insights that can help merchants target high lifetime value clients, and much more.

We partner with 2,000 banks across 28 countries, spanning over 30,000 bank branches. Noda supports a wide range of currencies for globally-minded clients and offers scalable plans to fuel your business growth.

How to Integrate Open Banking with Noda

1. Schedule a Demo

Complete the form, and our sales team will be in touch shortly to give you an in-depth tour of our open banking platform. Discover how our payment gateway can streamline your payment processes. We’re here to answer any questions and show you the full potential of what Noda can do for you.

2. Get Started with Noda

Onboarding with Noda is designed to be effortless. We provide personalised support from a dedicated manager who will guide you through every step of the setup process. From the demo to the integration, we’re committed to ensuring your transition is smooth.

3. Integrate Open Banking Gateway

We’ll guide you through the entire integration process. Our goal is to help you optimise your payment process to increase conversion rates, ensuring that more customers complete their payment journey. Additionally, we offer expert advice on user experience (UX) and user interface (UI) design, drawing from our extensive experience across various industries.