Back in 2023 we posted an opening banking article and how its used in block management. In March 2024 RICS published guidance for their regulated firms (we are one) about these third-party transaction service providers.
What are third-party transaction service providers?
Internet-based payment processing services i.e. those providing opening banking services.
Which one does Alexandre Boyes use?
We do not use a third-party transaction service provider directly instead it is via the Resident Block Management platform used by over 270 agents including Alexandre Boyes, our clients and leaseholders. Via “application programming interface” (API) one software program talks to another and they share information between themselves.
Who are Yapily?
Yapily are an API technology provider as well as an open banking technical service provider in line with the provisions of the Payment Services Regulations.
Do Alexandre Boyes or Alexandre Boyes Clients get charged for this?
No. Resident has a license with Yapily so Resident pays the subscription so that its end users benefit.
What does Yapily do via Resident?
Via Yapily’s API, Resident automatically imports transactions from multiple client bank accounts pulling bank feeds overnight. This means that each account is ready to reconcile in the morning and the fund balance showing on the dashboard is in real time. Put simply, Resident’s software talks to the bank’s software via Yapily’s API.
Does Yapily hold or handle client funds?
No. There is no holding, or movement of any funds.
Who does hold Alexandre Boyes client funds?
Client money is held in an appropriate banking institution authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Block management’s client funds are held in separate designated discrete accounts over which we have exclusive control. The client pays the bank charges but any interest earnt is paid into the client account, although as most are current accounts for practical reason, there is no interest.
Are third-party transaction service providers risky?
Open banking in the UK is guided by the Open Banking Standard (OBS) and uses rigorously tested software, security systems, and data is encrypted. To reduce the risk of payment fraud and protect customer data Strong Customer Authentication is used. Banks or payment providers verify identity when users make electronic payments or access an account online using additional layers of security like two step verification. Open banking requires explicit consent to be given to regulated apps or websites. For Resident users to keep bank feeds active the OBS requires that consent is renewed every 90 days. So AB needs to actively consent every 90 days otherwise access to the bank feeds are blocked.
Are third-party transaction service providers regulated?
Yes. The Financial Conduct Authority (FCA) require companies to follow strict rules and stringent standards to keep data secure. Only apps and websites regulated by the FCA or a European National Competent Authority can enrol in the Open Banking Directory (Yapily is enrolled).
Further reading?
You can read our original open banking article here, the RICS guidance here and all about Alexandre Boyes client money handling and protection here . As with all Alexandre Boyes blogs, these are intended to be a general overview of topical issues and should not be relied upon for formal purposes. Posted 24/4/2024
