The closure comes just four months after the company secured funding from Ecotricity, a green energy firm. Tred offered current accounts that offset customers' carbon emissions through a tree-planting initiative in Scotland.
However, the company’s co-founder cited changes in financial regulations regarding Authorised Push Payment Fraud (APPF) as the key reason for the decision, stating that the new rules made the business model unsustainable for smaller firms.
Impact of regulatory changes
Under the revised APPF rules implemented by the Payment Services Regulator (PSR) on 7 October 2024, payment providers are required to reimburse fraud victims up to a cap of GBP 85,000, with a GBP 100 excess applied to claims. With these new rules, the PSR aims to mitigate possible prudential risks to PSPs, thereby protecting their customers from any potential long-term adverse impacts. The regulator considers this to strike an appropriate balance having regard to all of the PSR’s statutory objectives.
Company officials commented on LinkedIn that while the journey had been remarkable, the regulatory changes posed challenges that Tred could not overcome. Reflecting on the experience, they acknowledged the efforts of the team, and the community built around the business. In its latest financial filings, Tred reported a GBP 1.6 million loss and employed 16 staff.
Recent investment and wider context
The announcement follows Tred's recent investment from green energy firm Ecotricity. In September, Ecotricity company officials highlighted the importance of aligning banking practices with environmental sustainability, criticising large banks for their continued investment in fossil fuels. At the time, they praised Tred's mission as a step toward using business to drive positive change.
In 2021, Tred secured GBP 1 million through a Crowdcube raise, followed by an additional GBP 600,000 crowdfunding round the next year.
