Freemium open banking data platform is a self-service data connectivity platform launched by Nordigen, a Latvian fintech, that integrates a freemium model. This freemium pricing model allows Nordigen to offer free open banking connectivity coupled with premium data analytics and insights services. Let us dig in to find more about the main principles of the freemium model.
Nordigen‘s freemium model works thanks to free open banking APIs.
Application Programming Interface (API) is a software intermediary that lets two applications communicate with each other. Generally, fintech can access open banking data by using both open banking-related APIs or direct bank APIs, also known as institutional APIs or private APIs. The difference between direct bank AIPs and open banking AIPs is that private APIs have a cost while open banking ones are free. Fintech must be licensed as an Account Information Service Provider (AISP) and (or) Payment Initiation Service Provider (PISP) to access these free open banking APIs. Once fintech becomes AISP and (or) PISP, they can reach these APIs in the name of their customers and get access to open banking data. Nordigen is an authorized Account Information Service Provider that connects to reliable and well-documented banking data AIPs of more than 1000 banks in Europe. Because of these free open banking AIPs, Nordigen can provide consumers with a single API that users can interact with to access the financial information from all their payment accounts for free.
What is the purpose of the freemium model?
Freemium, a combination of the words “free” and “premium”, is a pricing model which offers main products or services to users for free but charges money for supplemental or additional features, services, or goods. To put it differently, by using a freemium pricing model, companies usually provide services free of charge while also offering more advanced services at a premium. With the usage of the freemium model, Nordigen pairs already mentioned free access to open banking data with paid premium data analytics and insights services to help consumers get more of their data.
How does the freemium model benefit users?
In general, the freemium approach allows consumers, especially new ones, to interact with and explore services without pressure to make a purchase. Additionally, customers can learn about available services from first-hand experience. Also, users can decide what options of services they need to use, and if needs evolve, a service can easily be included in a customer’s workflow. To test how the freemium model works, create a free account on Nordigen’s open banking platform.