Gradually, banks across the European continent are doing away with long-standing banking processes that require certain pieces of data from users. From banks to credit providers, certain technologies are either undergoing a major overhaul or replacement.

One such technology is front-end scraping. More commonly known as screen scraping, front-end scraping has enjoyed mainstay status in banking processes for the latter half of the decade.

Scraping functions as an intermediary between a customer and an eCommerce site. Because companies use this form of technology to act on behalf of the user, front-end scraping becomes a value-added service.

While there is a collaborative effort between services that protect user data and businesses, a clamor for an alternative way exists in Europe.

With screen scraping no “passe” amongst financial institutions, methods like open banking have come into vogue.

Read on to learn more about screen scraping and the paradigm shift in payment platforms and processes in Europe!

Screen Scraping at a Glance

For more than a decade, financial institutions and users have sought ways to facilitate transactions between purchasers and businesses. A major limiting factor has been the inconvenience tied to entering transactional data like:

  • Credit card information
  • Personal details
  • Alternative payment platform login details

Before any third-party added service was introduced, users had to provide the above-mentioned — sometimes repeatedly.

This has created a demand for technologies that take this data as it appears on-screen and pushes it to the business or online shop. The innovation came in the form of screen scraping.

Screen scraping is whenever a third-party platform or service takes a user’s credit card information and other log-in details to purchase on the user’s behalf. Screen scraping allows a third-party service to use on-screen imputed transactional details.

The third-party platform or service then “impersonates” the user to which the log-in or transactional details belong. This allowed for successful checkouts, often in real-time.

How Screen Scraped Data Was Used by Banks and Institutions

Other than using user-generated data for faster and more successful payments, screen scraped data has served providers and banks in several ways.

Data that provides analysts with useful data that gives insight into a user’s behaviors. These behaviors are detected and extrapolated upon by using data to see trends.

The trends established from the user can be observed in the user’s:

  • Transactional data
  • Credit or debit card details
  • Bank account information
  • Any encumbered funds inside a user’s account

These pieces of information, among many others, are cross-referenced and triangulated. Screen scraped, the data is used to establish a user’s purchasing habits, financial standing, and other data that will prove resourceful for:

  • Bankers
  • Marketers
  • eCommerce platforms
  • Financial institutions

The Legal Status of Front-End Scraping

Being around for more than a decade and counting, front-end scraping has benefited users and businesses. However, concerns have mounted surrounding third-party data access. Questions arise as to whether or not third parties will be transparent in their use of front-end scraped user data.

The longevity screen scraping has enjoyed is indicative of its legal status. In other words, screen scraping or data scraping is not illegal — at least, not by itself.

However, the gray line exists due to the nature of the data being scraped.

Data scrapers, under the new legislation, may be held accountable for:

  • Infringement
  • Data protection act violation
  • Breach of contract
  • Breach of privacy

 

With authorization required, payment service providers need to submit to direct oversight. This allows the national government complete capability to survey the use of scraped data.

The Post-PSD 2 Payment Alternative: Open Banking

Despite the enforcement of the PSD 2, there are still concerns about data breaches. To address these concerns, Open Banking came to the fore as an alternative. And, it arrived at the perfect time since the PSD 2 has made scraped data less available for use.

With authorization required, payment service providers need to submit to direct oversight. This allows the national government complete capability to survey the use of scraped data.

Open Banking is one of several alternatives that replaced how payments were made via screen scraped data. Open Banking’s new technologies have engendered a trend towards smart payment solutions that are safe and reliable.

Open banking requires the participants in its payment and financial ecosystem to be authorized by the government. As a result, there is uniform enforcement of data safety. This keeps users protected as they go about transactions digitally.

Another benefit that has been associated with Open Banking is its reliability. With direct payment service providers having direct links to a user and merchant’s bank accounts, the lag time in payment processing is minimized.

Looking for a Smart, Reliable, and Transparent Payment Platform? Choose Payconiq!

Payment platforms dance to the beat of financial tech’s changes in Europe. Payconiq has served merchants in the Benelux to provide safe, reliable, and smart payment options.

From mobile payments to general payment processing, Payconiq has smart options for your business to profit in Europe.

Choose a payment platform provider that is changing the face of e-payments in Europe!

References:

https://www.finextra.com/blogposting/16494/open-banking-vs-screen-scraping-looking-ahead-in-2019

https://searchdatacenter.techtarget.com/definition/screen-scraping

https://www.rocketlawyer.com/gb/en/blog/to-scrape-or-not-to-scrape/

https://www.pwc.co.uk/industries/financial-services/insights/psd2-in-the-uk.html