Open Banking with TrueLayer
TrueLayer, a London based startup, has developed one of the first Open Banking using the Revised Payment Service Directive or PSD2 which is based on payment APIs. The payment initiation process applied by PSD2 allows the API to guarantee near-instant settlement. The API requires active bank authentication before any money is pulled from the account, a measure against fraud and identity theft, which promotes cheaper fees than on traditional card transactions. There are plans for expansion within the first year, adding future date payment, standing orders, and batch payments. The API is currently compatible with nine of the largest account providers and is filling the gaps in the European payments market.
Co-founder of TrueLayer, Francesco Simoneschi, claims that “both businesses and consumers will benefit substantially.” Faster payments mean that businesses can expect payments within seconds instead of potentially days. This advance is vital as transaction risk is a significant issue for a lot of businesses. On the flipside, the cheaper fees could have an effect on some major banks bottom line, as they generated considerable revenue from the credit and debit fees.
This type of innovation could completely change the way we, as consumers, interact with merchants and banks. It could potentially change the relationships between these large sectors,and it’ll be very interesting to see how technology is going to further change our lives and catapult us into the future.