What is TPP Full Form in Banking?
The TPP’s full form in Banking is Third Party Providers. Third-party providers are businesses or individuals who utilize APIs designed to meet Standards to access customers’ accounts in order to deliver account information services and initiate payments. Third-party providers might be either Payment Initiation Service Providers (PISPs) or Account Information Service Providers.
Types of TPP:
There are two types of Third Party Providers, namely Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP). The PISP allows users to make online payments with their bank accounts, eliminating the need for a credit or debit card. The AISP allows institutions to access read-only financial data of a user or SME.
Role of TPPs in Banking:
TPPs can provide new services, including budgeting apps, financial planning tools, and frictionless payment options to enhance the overall consumer experience. Allowing TPPs to access financial data makes the banking business more competitive, encouraging banks to innovate and improve their services. TPPs can create specialist services suited to marginalized communities, hence increasing financial inclusion. Also, banks can use TPPs to provide additional services without incurring the full expense of creation and maintenance themselves.
