OAuth 2.0
Overview
OAuth 2.0 is an open standard authorization framework that enables applications to access user data from another service securely without sharing login credentials. It uses tokens to grant limited access, ensuring better privacy and control.Widely used by banks, fintechs, and digital platforms, OAuth 2.0 supports secure connections for open banking, payment initiation, and identity verification. Regulators encourage OAuth for compliance with data privacy and consent requirements, as it allows customers to control what data is shared.OAuth reduces risks tied to password-based access while enabling interoperability between services. By supporting strong user consent mechanisms, OAuth 2.0 plays a vital role in ensuring compliance with global data protection and security standards like GDPR and PSD2.
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Related Terms
FAQ
What is OAuth 2.0?
An authorization standard that allows secure access to data via tokens.
Why is it important?
It enhances security by avoiding password sharing and supports consent control.
Who uses it?
Banks, fintechs, and digital platforms in open banking and IDV.
How does it help compliance?
By enabling privacy, consent, and secure interoperability.