The way people pay is changing – and this is driven by Open Banking. At Trustly, we see how this innovation is reshaping the financial landscape, offering faster, more secure, and cost-effective payment options. Over the next 12-18 months, expect even more. Open Banking will expand in unimaginable ways, bringing benefits to both consumers and merchants.
Open Banking enables consumers to make payments directly from their bank accounts, bypassing traditional intermediaries like card networks. This technology – with its streamlined processes – is already showing significant benefits for businesses and consumers across the world.
Lower costs for merchants: by eliminating card network fees, Open Banking reduces transaction costs for businesses, which can lead to price drops for consumers.
Improved conversion rates: Open Banking simplifies the payment process, leading to higher checkout conversion rates as fewer steps result in fewer abandoned transactions.
Upgraded security: with Strong Customer Authentication (SCA), Open Banking offers a higher level of security, reducing fraud risks compared to traditional card payments.
While the advantages for merchants are clear, consumers will also experience significant benefits from Open Banking:
More payment choices: Open Banking gives consumers an additional, secure payment option that’s faster and more convenient than cards.
Lower prices: as merchants reduce costs by eliminating card fees, these savings can be passed on to consumers, especially in sectors like retail, travel, and entertainment.
Better security: Open Banking payments are authenticated directly through the consumer’s bank, offering a more secure experience and reducing the risk of fraud.
Instant payments: Open Banking payments are processed in real time, allowing consumers to receive immediate access to services without delays often caused by card payments.
Payment flexibility: Trustly’s Open Banking platform allows for innovative, flexible payment solutions that help consumers better manage their budgets and cash flow.
Several major industries have already adopted Open Banking through Trustly and experienced major improvements:
UK government: the company’s collaboration with HMRC, by volume, has become the single biggest use case for Open Banking payments in the UK with GBP 30 billion of tax payments processed since launch.
ACE Money Transfer: since the partnership began in 2021, the company has seen a staggering 40% growth in remittance.
PointsBet: one of the standout success stories comes from PointsBet, which saw a 210% growth Year-over-Year in completed transactions by improving approval rates.
These examples highlight how Open Banking is delivering tangible results for businesses across industries.
A key driver behind our Open Banking success is Trustly’s proprietary data engine.
• Optimised payment flows: Trustly helps merchants streamline the payment process by analysing real-time data, reducing friction and improving conversion rates.
• Fraud prevention: Trustly’s advanced analytics help identify and mitigate fraud risks, ensuring a safer environment for both merchants and consumers.
• Boosted performance: Trustly enables merchants to customise the payment experience, further improving customer satisfaction and driving higher completion rates.
• Consumer insights: Trustly helps merchants leverage Open Banking Data to power personalise consumer experiences based on their spending habits.
One of the most exciting areas for Open Banking is Pay by Bank. As more businesses embrace subscription models, the reliability of recurring payments is crucial. Open Banking offers several advantages over traditional card payments.
• Increased conversion: more payment methods with intelligent remember-me functionality help drive conversion for merchants.
• Lower costs for merchants: merchants, especially those with high-volume transactions, can save significantly by bypassing card fees, making payments more cost-effective.
• Reduce payment failures: with Open Banking, failed payments are minimised, leading to a 25% reduction in involuntary churn. Open Banking avoids issues with card payments, such as expiration by directly connecting to bank accounts, ensuring a higher success rate for recurring transactions.
• Improved customer experience: for consumers, Open Banking offers a ‘set it and forget it’ experience. Once their bank account is linked, there’s no need to update payment details, ensuring uninterrupted service.
• Reduced fraud: Open Banking allows access to advanced risk analysis, built on processing hundreds of millions of high-risk payments transactions.
As leaders in the payment industry, we believe Open Banking will transform how consumers and merchants interact. Its potential for higher conversion rates, reduced costs, and improved security will drive adoption across multiple industries. For subscription-based businesses, in particular, Open Banking will provide a more reliable and seamless solution for recurring payments, reducing churn and improving the customer experience.
At Trustly, we are committed to advancing Open Banking through the power of our technology, helping businesses and consumers alike benefit from this payment evolution. The future of payments is here, and Open Banking is leading the charge.
This editorial piece was first published in The Paypers' Open Finance Report 2024, the latest comprehensive market overview and analysis focusing on the key players and products within the Open Banking and Open Finance ecosystem. Download the full report to discover more insightful content.
About Johan Tjärnberg
Johan Tjärnberg is the Group CEO of Trustly AB, where he leads the global strategy for advancing Open Banking payments. With over 20 years of leadership experience in fintech, Johan drives innovation and growth in the payments ecosystem.
Alexandre Gonthier, Founder & CEO of Trustly, Inc., the Americas division of Trustly AB, is a seasoned entrepreneur, he has co-founded multiple successful payment companies and leads Trustly's expansion in North America, focusing on Open Banking solutions.
Trustly’s Open Banking platform enables payments directly and instantly between bank accounts. Often known as Account-to-account (A2A) payments or Pay by Bank. Trustly operates the world’s largest network for direct payments, connecting 9,000 merchants and 12,000 banks in a seamless financial ecosystem. To date, over 112 million consumers have used Trustly’s products globally, and are on track towards processing $100 billion in Total Payments Value (TPV) in 2024.
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