TrueLayer, Europe’s leading provider of Open Banking and financial APIs, has launched one of the first Open Banking and PSD2 based Payments API.
The API, which is in public Beta, offers a new way for businesses and consumers to pay for goods and services or transfer money. It is an alternative to credit and debit card payments, bank transfers and traditional payments processors.
By using the payment initiation process created by PSD2 – the European Directive that oversees ‘Open Banking’ in the EU – the API confers a number of benefits:
- Immediate settlement – cleared funds are received in few minutes (during business hours) – in contrast to the several days experienced by most businesses
- Secure and fraud-proof – the API requires active bank authentication before any money can leave the account. This means high security and extremely low fraud rates
- Cheaper – as there is no credit extended and fraud is highly unlikely payments do not have the high fees of card transactions
- Streamlined – customers do not need to manually type in a business’s bank account number to transfer money to a business
The API works with all major UK banks, and more specifically, the CMA9. TrueLayer, which was one of the first companies in Europe to be approved as an Authorised Payment Institution with PSD2 permissions – Account Information Services and Payment Initiation Services, believes this API marks a major milestone in the development of Open Banking in the UK and the liberalisation of financial services.
Francesco Simoneschi, CEO and co-Founder of TrueLayer, said: “Companies often throw out cliches such as ‘game-changing’ or ‘disruptive’ when they launch a new product, but in this instance we are looking at a very meaningful and very important innovation. It puts the banks back at the centre of the payment process, allowing them to create competitive and differentiated payment experiences as well as enabling entirely new opportunities for deeper purchase flows into the banks’ mainstream digital channels. For fintech applications and merchants, payments initiation fills a huge gap in the European payments market for use cases that are currently largely underserved by traditional payments products.
“The fraud prevention aspect of the API alone would have made a huge impact, however, it is just one of a range of benefits. Near instant transactions, low fees and a streamlined process are all significant and tangible improvements for businesses and consumers.
“When Open Banking was launched this was the development many people in the financial industry were waiting for. It is a new form of online payments that will add much needed competition and open the door to range of innovative applications. Our entire team has worked incredibly hard to develop it and the most exciting aspect is that it’s only the beginning.”
The Payments API began beta testing with a dozen companies including digital wealth manager Moneyfarm and ‘build your own fintech’ platform Wealth Kernel.
Giovanni Dapra, CEO and co-Founder of Moneyfarm, said: “We firmly believe that technology has the capacity to radically improve customer experiences in the financial services industry and, ultimately, help people realise their financial goals.
“This is why we’re delighted that TrueLayer has launched an Open Banking Payments API. Its potential to ease a lot of pain points by improving the security, speed and availability of transactions is very exciting. We have been anticipating a breakthrough like this from Open Banking which will directly benefit our clients and encourage further innovation in this space.”
Joe Campbell CTO of WealthKernel, said: “TrueLayer’s new API will enable our clients to quickly build products and services that offer a highly secure fully integrated payments experience. Not only does it greatly reduce our operational costs and risks, it also improves conversions and provides a great user experience.
“This is an incredibly important step in the realisation of Open Banking’s potential. It provides a vehicle for a host of new applications to enter the market which will vastly improve how financial services work for businesses and consumers. We’re very impressed by the Payments API and excited to see the innovative ways it will be used.”
TrueLayer expects to launch an updated Payments API later in 2019 which will add features such as future dated payments, standing orders and batch payments.
The Payments API launch follows last month’s extension of TrueLayer’s Data API to Germany. Over the last year it has secured a series of major partnerships with companies including Zopa, ClearScore, CreditLadder, Canopy, Plum, BitBond, Emma, Anorak. It also has a number of undisclosed partnerships in the pipeline with major companies in the consumer and financial space that will go live in the next 12 months.