Open Banking in Portugal: Adoption, Connectivity & Market Outlook

Dive into the outlook of open banking adoption in Portugal, where it’s a spot favoured by startups but regulatory challenges remain a hurdle. Discover how the absence of local TPPs versus European entrants shapes the market.

Open banking in Portugal offers a fascinating narrative of untapped potential, regulatory evolution, and market dynamics that echo the broader European fintech landscape. This article explores the current state of open banking adoption in Portugal, addressing the unique challenges it faces, and looks out onto the horizon of opportunities and recommendations for stakeholders.

Open banking adoption in Portugal

The adoption of open banking in Portugal presents an intriguing case within the context of Europe’s open banking landscape. Initially, Portugal did not stand out for its number of Third-Party Providers (TPPs) registered with the Bank of Portugal. However, its dynamic startup ecosystem, supported by a substantial talent pool, hints at an underlying potential that contrasts with the relatively low number of registered local TPPs. Notably, approximately 74 European TPPs have been passported to operate in Portugal, indicating an active interest in the country’s open banking sector, albeit with room for growth and optimisation.

Julien Grandjean, director for financial institutions at Fitch Ratings, stated last year, “The Portuguese banking sector remains highly competitive, given the number of financial institutions in the market and the moderate size of the country’s economy.” This competitive environment could provide fertile ground for open banking, raising questions about how this potential can be unlocked amidst the existing market dynamics.

The integration of open banking and its acceptance among consumers in Portugal encounter specific challenges. Established local payment methods, such as MB Way and “Referência Multibanco,” are deeply embedded in the country’s financial culture, posing significant barriers to the adoption of innovative open banking services. Furthermore, the influence of SIBS, the national payment solutions provider, looms large over the payments landscape, potentially curtailing the space for innovation and new entrants in the market.

This exploration of open banking adoption in Portugal reveals a journey marked by a slow start, yet underscored by significant opportunities for growth. The contrast between the initial registration of TPPs and the interest from European entities, set against the competitive banking environment and entrenched payment practices, prompts a closer examination of how Portugal might navigate these challenges.

As the country continues to explore the possibilities within open banking, it raises intriguing questions about the future trajectory of digital finance in Portugal and how these emerging technologies can be harmonised with traditional financial systems.

Yapily’s Portugal Open Banking Coverage

Our open banking platform went live in Portugal in August 2022, and we now support 29 banks and financial institutions across the country.

Explore the list of available institutions via Yapily’s open banking platform.

Future adoption of open banking in Portugal

As Portugal embarks on its journey towards Open Finance, it stands at the brink of a potential transformation. Central to this shift is the Bank of Portugal’s National Strategy for Retail Payments, which underscores the critical role of open banking/PSD2 and interoperable eID solutions in advancing secure and efficient payment systems. This strategic direction points towards a more streamlined and secure financial landscape, positioning Portugal to leverage the benefits of digital innovation in banking and payments.

The anticipated rise of Open Finance aims to extend the financial ecosystem beyond traditional banking institutions to include sectors like telecommunications, insurance, and utilities. This expansion is poised to offer consumers a wider array of choices, enhance operational efficiencies, and foster a more inclusive environment for financial services. The urgency for businesses to adopt Open Finance solutions has been accentuated by the digital push induced by the pandemic, highlighting the necessity for competitive adaptation in a rapidly changing economic environment.

For this promising transition to materialise effectively, it is imperative that Portuguese regulatory bodies craft and disseminate clear guidelines and supportive frameworks. Such measures would enable Third-Party Providers (TPPs) to navigate the emerging market landscape with greater ease, thereby catalysing innovation and enhancing competition within the sector.

Furthermore, addressing consumer hesitations through education about the benefits and security features of open banking is essential. By mitigating concerns over traditional payment methods, there is a significant opportunity to cultivate a more digitally focused financial culture.

Lastly, there is a rich opportunity for stakeholders to explore beyond the conventional scope of payment services. The development of applications encompassing financial management tools, personalised banking services, and comprehensive financial ecosystems can cater to diverse consumer needs. This broader exploration of open banking’s potential invites a reflective and informed discourse on the future of Portugal’s financial landscape, encouraging a deeper engagement with digital finance solutions that resonate with evolving consumer preferences.

Through a seamless integration of these strategic elements, Portugal is not only enhancing its financial services landscape but also setting a precedent for a digitally empowered and consumer-centric future in finance.

Our powerful API connecting across Portugal

Our extensive network, spanning the leading banks and financial institutions, enables your business to innovate, optimise processes, and enhance customer satisfaction. Discover the transformative impact Yapily can bring to your business in Portugal.

Speak to our open banking experts to explore our platform and discover how we can help your business connect to Portugal.


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