Voice of the Industry

Open Banking is crowning a new champion

Thursday 28 October 2021 09:17 CET | Editor: Vlad Macovei | Voice of the industry

Who will be the new champion of Open Banking? Ciaran O’Malley, VP of Partnerships at Trustly, shares insights about A2A, APIs, card schemes, how banks see Open Banking, how the US catches up, and more

This article was originally published inside the Open Banking Report 2021. Click here to download the full report.

Open Banking has the power to inspire better relationships between consumers and businesses. With access to account and payment data held by financial institutions, truly innovative financial products and services are given the chance to flourish. This, essentially, is what will drive better customer experiences and more opportunities for merchants. Many banks’ new and improved Open Banking APIs make it possible for merchants to integrate Open Banking Payments, enabling people to pay straight from their online bank accounts. They also open the door to better UX, less fraud, and the possibility of more competitive pricing. However, APIs alone won’t quite cut it.

Not all Open Banking solutions are equal

As good as they are, Open Banking APIs need an added layer of complexity that few merchants can afford to build themselves. Initiation-only and API aggregators deliver the basic level of services, and reconciling individual Open Banking Payments is challenging, so merchants risk non-settlement. Plus, there’s no support for payouts or refunds with initiation-only APIs. Merchants would need to build a process to find the bank account number and make a manual payment to the customer for the refund. Staffing and admin costs alone would be astronomical.

Not all Open Banking solutions are created equal. Trustly’s experience from working with Open Banking for a number of years now lends itself perfectly to what merchants need: a solution that offers more than just API aggregation.

Founded in 2008, Trustly is uniquely positioned to initiate payments and ensure that merchants get their money by being present throughout the flow of funds. Our tried-and-tested product, together with local liquidity management, empowers us to instantly notify merchants about the movement of funds. This means we can remove unsettlement uncertainty and quickly execute refunds. These behind-the-scenes processes typify the Open Banking initiative – not only because they simplify merchants’ payment processes, but also because they help ensure that their customers enjoy premium experiences.

Open Banking and the evolving relationship with banks

In this new, pandemic-influenced world of ecommerce, consumers want speedy, secure, and convenient payment experiences that are curated and personalised. Consumers increasingly use banks for new services because of the convenience and flexibility they offer. This includes account-to-account payments.

Open Banking is a catalyst for supplying this demand – meaning people will not be going back to greater degrees of friction. Speaking of which, the demise of credit and debit cards is, for many reasons, on the cards.

Open Banking will topple the current champion

Card schemes and interchange fees continue their rapid upward trajectory. Security is an important issue, with Strong Customer Authentication, or SCA, implementation inevitably adding additional costs going forward, as well as increased complexity for merchants.

Together, these issues make an Open Banking solution more attractive to merchants. Despite the massive surge in Open Banking solutions hitting the market over the past few years, some key regions are struggling to keep pace when it comes to Open Banking adoption. Hopefully, that’s about to change.

Exciting times for US Open Banking

While the EU, UK, and (to an extent) the APAC region lead the way in Open Banking, some key regions are still catching up. Open Banking adoption in the US has historically lagged behind due to obstacles such as technology fragmentation, a lack of regulation, and an inconsistent data framework. However, a recent executive order issued by Joe Biden represents a tremendous step forward for the Open Banking and Open Finance movement in the US. It will be exciting to see how this helps foster more convenient and transparent banking experiences for US consumers and explore ways to take their business beyond the border. For US merchants wanting to expand into Europe or the UK, Trustly can help you with the following:

  • Instant automated refunds;
  • Cross-border and FX;
  • Embedded reconciliations;
  • No cost to go live;
  • No local requirements.

Account-to-account: a new champion in town

To take full advantage of Open Banking, you need a partner who can help you accelerate payment settlement and refunds while helping you efficiently expand across borders. With a bank network of more than 6,300 banks and access to over 525 million consumers worldwide, Trustly is the undisputed leader in account-to-account payments and is uniquely positioned to help your business achieve all this. With Trustly, merchants can process payments up to 50% cheaper than card payments and seamlessly grow revenue. Leverage the power of Open Banking with the world’s most comprehensive account-to-account payments solution. The new champion-elect.

For more on Trustly’s full-service, future-proof, cost-cutting, consumer-preferred payments solution, visit trustly.com

About Ciaran O’Malley 

Trustly’s VP of Partnerships, Ciaran O’Malley, joined Trustly in 2016. His team builds and maintains relationships with PSPs, platforms, and other technical integrators. He has been involved in Open Banking in the UK and initiatives like SWIFT’s Pay Later API standard.

About Trustly

Founded in 2008, Trustly is the global leader in digital account-to-account payments. Able to handle the entire payment journey, Trustly is unique from the competition. In 2020, Trustly processed over 21 billion USD in transaction volume across its global network. Trustly has over 500 employees across Europe and the Americas.

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Keywords: Trustly, Open Banking, API, account-to-account payment, banks, card scheme
Categories: Banking & Fintech
Countries: World
This article is part of category

Banking & Fintech