German online-only lender Fidor has signed a memorandum of understanding (MOU) with crypto-payment software provider Token to offer digital payment services to third parties.

The partnership will allow Fidor to integrate Token’s software into Fidor OS, its digital banking and open community middleware solution.

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Token offers transaction-based open banking API by integrating smart tokenisation and public-key cryptography. The company’s software is used by banks to issue and redeem payment authorisations as smart tokens that can be programmed as per the account holder’s instructions.

The payments provider said that its helps put a bank in sole charge of their own digital payment network, thereby phasing out the requirement of depending on partners to carry out digital transactions and launch new services.

Token founder and CEO Steve Kirsch said: “In the short-term our platform can be used as a springboard to generate revenues from PSD2 and XS2A.”

“In the longer term, it can be applied to enhance the security, speed, cost and efficiency of a massive range of transaction-based banking functions which currently rely on traditional legacy processes, from bill pay, to e-commerce checkouts, international money transfers, B2B payments, intra-bank transfers and more.”

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Fidor CEO Matthias Kroner said: “Like Token, our OS is modern, modular, open, API-based and free of legacy code. This enables Banks to use our suite of technologies to tailor their digital infrastructure to the precise needs of their customers. Adding Token to the mix simply extends the power and control we give to Banks in the digital age.”