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Open Banking

Open Finance

An island country in the Mediterranean Sea, Malta still has cash as the dominant payment method for many individuals, however the number of card payments at retail locations has increased in recent years.

According to Kepios, 88% of Malteses had access to the internet in 2022. Of all Maltese using the internet, 63% use the internet for online banking, which is 3% below the EU average. Additionally, Malta ranks 5th in the integration of digital technologies and 3rd in digital public services among EU countries. 

Malta falls under the PSD2 legislation and has adopted Berlin Group’s NextGenPSD2 standard. PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019.

The EU Commission has announced its intention to adopt an Open Finance regulatory framework.

According to The Global Findex Database, 96% of Maltese adults had bank accounts in 2021. In Malta, cash is still the dominant payment method for many individuals when purchasing goods and services. However, a recent report by the Central Bank of Malta showed that the number of Point-of-Sales (POS) terminals, which are hardware systems for processing card payments at retail locations, has increased in recent years. Moreover, the vast majority of such terminals are now contactless. 54.2% of Maltese does not conduct any e-payments whilst 91.1% does not use mobile payments. Finally, 50.3% of the population is reluctant or completely against participating in a cashless society.

According to the Malta’s Minister for Financial Services and Digital Economy, payment services are a key enabler of not only financial services but of the broader economy. Innovation in payments is happening at a very fast pace and Malta is also pioneering in its legislative framework, especially when it comes to areas such as remote gaming and blockchain. Government believes that by enhancing synergies between sectors and enabling technologies and services such as payments, they can further strengthen and diversify the economy. 

As of 2022, Malta had no domestic Third-Party Providers (TPPs).

When Maltese financial businesses were queried as to whether their organisation had considered how Open Banking solutions could enhance their operations and service lines, 90% replied in the affirmative, with 44.44% claiming that they intend to adopt Open Banking solutions in the future. The remaining 55.56% of respondents stated that whilst their organisation had no immediate plans to integrate OB products into their current service offering, they may do so in the future. When asked what key benefits PSD2 can unlock for FIs and other Fintechs, 40% of respondents felt that the main value is derived from the potential collaborations with banks and other Institutions. A further 30% cited increased revenue opportunities as a determining factor, whilst another 20% chose to value additions to their current service portfolio above all else.

Malta ranks 7th in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.

The Malta Financial Services Authority (MFSA) has launched the MFSA Regulatory Sandbox, which provides a regulatory environment for Fintechs to test their innovations for a specified period of time. 

Malta has adopted the Berlin Group’s NextGenPSD2 technical standard.