TrueLayer introduces instant bank payments in Europe

Tell us about the state of online payments in Europe. What do consumers expect from payments and what are they experiencing?

Right now, there’s a gulf between what users expect from online payments and what they’re actually getting. 

Last year, TrueLayer conducted research that showed online shoppers were more likely to buy from places that offered their preferred payment option. The same survey found that doubts about payment security prevented three in five respondents from buying something online. So the average consumer wants to pay in the way that’s most convenient for them, and they expect to feel safe doing it. 

Unfortunately, that doesn’t align with the actual experience of paying online. Cards still command a significant market share in countries like France, Ireland, and Spain, but they weren’t made for digital commerce. They’re slow, they’re insecure and they’re prone to failure. Alternative payments are gaining ground and domestic bank payments, such as iDEAL in the Netherlands, are popular where they’re available, but there’s definitely room for improvement in online payments.

What difficulties do consumers face when paying online? And what issues do merchants face when trying to receive these payments?

For consumers, friction is a big one. If you’re paying with a card or a manual bank transfer, you need to enter sensitive information manually. Not only is that a really slow and cumbersome process, but it also leads to errors that can cause payments to fail. When you then factor in the added strong customer authentication (SCA) steps for cards, the whole thing starts to feel like a long, drawn-out process.

Then there’s fraud, which continues to be a big problem in Europe. Card fraud losses totaled EUR 1.55 billion in 2019, with card-not-present (CNP) fraud continuing to rise. And while the UK accounted for a significant portion of those figures, France, Germany, and Spain all ranked amongst the top five countries for card fraud losses.

For merchants, online payment processing is often prohibitively expensive. With cards, you have interchange fees and chargebacks. Then you’ve got buy now pay later (BNPL), which also suffers from high merchant costs. Methods like manual bank transfers are cheaper on the surface, but they require reconciliation processes that can quickly become costly.

Finally, settlement speed is a major barrier on both sides. Card transactions can take up to 10 days to settle, which makes it hard for merchants to manage their cash flow properly. But it also bogs things down for customers. Users often have to wait for funds to settle before they can get a refund or use funds they’ve deposited to an online account. That can lead to uncomfortable and inconvenient delays where their money has left their account, but they can’t reap the benefits of their transaction. Often, consumers will end up contacting the merchant about the issue, increasing the merchant’s customer support costs as well.

What is TrueLayer Payments, and how does it address these issues?

TrueLayer Payments removes the cost and friction of other payment methods while also bolstering security. It runs on the back of Open Banking and Europe’s fastest payment rails. We recently rolled it out in Ireland, France, Germany, Spain, Lithuania, and the Netherlands.

Basically, TrueLayer Payments gives users access to instant data-rich payments. 

Businesses can use it to offer instant pay-ins, which let users access their funds in seconds. TrueLayer Payments can also initiate instant, error-free withdrawals and refunds, removing the need for manual processing. The result is fast, cost effective, and virtually fraud-free payments.

What problems does TrueLayer Payments solve for businesses? And what value does it offer to consumers?

The value of TrueLayer Payments really goes back to fixing those original flaws in online payments: cost, speed, and security. By leveraging this method, businesses can offer a faster, safer experience that benefits them and their customers alike.

Let’s start with the cost angle. Unlike cards, TrueLayer Payments don’t incur interchange fees or chargebacks. And since they allow merchants to automate processes like reconciliation, they remove the operational costs of things like standing orders and manual transfers. In short, it makes accepting payments less expensive.

Speed is also an important factor here. With TrueLayer Payments, businesses and customers both get access to their funds immediately. That makes a big difference for trading apps, for example, because it means customers can start investing their deposits right away. In fact, our research shows that almost half of current investors would switch to a trading platform that offers instant withdrawals. So providing a fast experience is crucial.

On the security side of things, cards and other payment methods often require businesses to store their customers’ credentials, like passwords and card numbers. That obviously presents a huge fraud risk. But TrueLayer Payments are both PSD2 compliant and authenticated directly with banks, so customer details are never stored. This ensures their data remains safe and secure. 

How does TrueLayer Payments differ from other Open Banking products in Europe?

TrueLayer is very focused on helping merchants provide the best experience possible for the end user. Unlike other payment providers, we don’t push our brand on consumers. Merchants are able to customise our payment screens with their own branding. This approach means that customers stay on the websites or within the apps of our merchants and their banks. This makes consumers more comfortable with the payment method and helps boost conversion rates. 

Ultimately, TrueLayer Payments gives merchants and end users exactly what they want: a smooth and efficient experience.

About Till Wirth

Till Wirth is TrueLayer's Head of Product for Core Banking. An alumnus of Oxford University and NYU, he previously served as a Lead Product Manager at GOV.UK/Pay.

About TrueLayer

TrueLayer is a global open banking platform that makes it easy for anyone to build better financial experiences. Businesses of every size use TrueLayer to power their payments, access financial data, and onboard customers across the UK, Europe, and Australia. Founded in 2016, TrueLayer is trusted by millions of consumers and businesses around the world. Our vision is to create a financial system that works for everyone.