Data Sharing in Payments: Why Security and Collaboration Matter More Than Ever

Payments are moving faster, becoming more complex, and crossing more borders than ever before. At the same time, fraud is increasing, compliance requirements are tightening, and customer expectations around transparency are rising.

In this environment, data sharing in payments is no longer a theoretical discussion. It is becoming a practical necessity for banks, fintechs, and payment platforms that want to operate securely, efficiently, and at scale.

The challenge is not whether financial data should be shared — but how to enable data sharing in payments without compromising security, privacy, or regulatory compliance.

Why Data Sharing in Payments Is Still Limited

Despite clear benefits, data sharing in payments remains fragmented. Most financial institutions still operate with limited visibility beyond their own systems.

The reasons are well known:

Regulatory and Privacy Constraints

Financial data is highly sensitive. Transaction data, account details, and behavioral signals fall under strict privacy laws such as GDPR. Any form of data sharing must be consent-driven, auditable, and reversible.

This makes institutions cautious — sometimes overly cautious — even when sharing anonymised or non-personal signals.

Risk Aversion and Liability

Banks and payment providers remain responsible for the data they process. Sharing information with other parties introduces perceived legal and reputational risk, particularly if governance frameworks are unclear.

Lack of Standardisation

Different institutions store and label data differently. Without common standards, shared data can be incomplete, inconsistent, or difficult to interpret — reducing its value.

As a result, data that could improve fraud detection, payment routing, and customer experience often remains locked inside individual organisations.

From Raw Data Sharing to Secure Intelligence Exchange

Modern data sharing in payments does not mean exchanging raw transaction records or customer profiles.

Instead, the industry is moving toward secure intelligence exchange, where institutions collaborate using:

• Anonymised risk indicators
• Aggregated performance metrics
• Transaction status updates
• Outcome signals (success, rejection, delay reasons)

This approach allows participants to benefit from shared insights while keeping sensitive personal data protected within each institution’s environment.

Key Areas Where Data Sharing in Payments Adds Real Value

1. Financial Crime Prevention (AML, KYC/KYB)

Fraud and money laundering rarely affect just one institution. Criminal activity often spans multiple banks, payment providers, and jurisdictions.

By sharing anonymised fraud indicators — such as compromised account patterns, high-risk device fingerprints, or behavioural red flags — institutions can significantly improve AML and KYC/KYB effectiveness.

Benefits include:

• Earlier detection of emerging fraud patterns
• Fewer false positives
• Better risk scoring across institutions
• Stronger regulatory compliance

This collaborative approach strengthens the entire ecosystem without exposing personal data.

2. Verification of Payee (VoP)

Verification of Payee (VoP) has become critical as authorised push payment (APP) fraud increases.

Today, VoP coverage is inconsistent:

• Some banks support real-time checks
• Others rely on legacy systems
• Cross-border VoP is often limited or unavailable

Data sharing in payments enables VoP systems to be enhanced with shared intelligence, such as:

• Historical success and failure patterns
• Known mismatch behaviours
• Anomalous destination activity

This improves accuracy, reduces false warnings, and helps prevent misdirected or fraudulent payments.

3. Smarter Payment Routing

Payment routing decisions are often made using static rules, even though network conditions change constantly.

By sharing anonymised performance data across payment rails — speed, cost, success rates — institutions can make better routing decisions in real time.

This results in:

• Faster international payments
• Lower processing costs
• Higher success rates
• More predictable delivery times

For businesses sending high-value or time-sensitive payments, this type of data sharing in payments directly improves operational outcomes.

4. End-to-End Payment Transparency

One of the most common customer complaints remains: “Where is my payment?”

Once a payment leaves the originating institution, visibility often disappears — especially when multiple intermediaries are involved.

By sharing transaction status updates across institutions, payment providers can deliver:

• End-to-end payment tracking
• Faster issue resolution
• Clearer explanations for delays or rejections
• Reduced support costs

Transparency builds trust — and trust is essential in payments.

5. Shared KYC/KYB Utilities

Onboarding businesses is expensive and repetitive. Each institution collects similar KYC/KYB information, often asking customers to submit the same documents multiple times.

Secure, consent-based data sharing allows verified identity and business information to be reused across institutions, while each provider still applies its own risk controls.

The result:

• Faster onboarding
• Lower compliance costs
• Better data quality
• Improved customer experience

Governance and Security Are Non-Negotiable

Effective data sharing in payments requires strong governance. Without it, collaboration creates more risk than value.

Key elements include:

• Clear consent management
• Defined access controls
• Auditability and traceability
• Data quality standards
• Accountability across participants

Advanced security technologies — such as confidential computing, secure enclaves, and encrypted processing — make it possible to analyse sensitive data without exposing it.

Why This Matters for Payment Platforms Like Transferra

Payment platforms handling cross-border and high-value transactions operate in complex environments. Customers expect speed, clarity, and security — simultaneously.

Data sharing in payments enables platforms like Transferra to:

• Improve fraud prevention without increasing friction
• Deliver clearer payment tracking
• Reduce failed or delayed transactions
• Operate more efficiently across borders

Importantly, this can be achieved while remaining compliant with GDPR, AML, and evolving regulatory frameworks such as PSD2 and PSD3.

The Future of Data Sharing in Payments

The payments industry is moving away from isolated systems toward connected networks built on trust, security, and consent.

Institutions that embrace responsible data sharing will:

• Detect risk earlier
• Resolve issues faster
• Deliver better customer experiences
• Scale more confidently across markets

Those that remain siloed will struggle to keep pace.