TrueLayer & Stripe in UK Open Banking Partnership
TrueLayer, a Top 10 Open Banking Company and Europe's foremost Open Banking payments network, has announced an expansion of its partnership with global payment giant Stripe.
This collaboration positions TrueLayer as the backbone of Stripe's Pay by Bank service across its UK payment products, marking a significant milestone in the adoption of Open Banking technology.
The partnership comes at a crucial time for the fintech industry, as businesses increasingly seek alternatives to traditional payment methods.
Pay by Bank, which Stripe unveiled in May, allows merchants to accept payments directly from customers' bank accounts, bypassing the need for credit card transactions.
This approach not only streamlines the payment process but also promises substantial reductions in transaction fees – a key consideration for businesses operating on tight margins.
Francesco Simoneschi, Co-founder and CEO of TrueLayer, says: “We're thrilled to be Stripe's open banking partner in the UK. By collaborating on Pay by Bank, we're offering customers the option to pay with their preferred bank account instead of a credit card. This is a significant milestone in the evolution of digital commerce.”
Stripe: Removing barriers to checkout flows
The move aligns closely with Stripe's stated objectives. In its annual letter published in March, the company emphasised the importance of removing barriers in online purchases and checkout flows.
TrueLayer's open banking technology is well-positioned to support this vision, powering flexible, real-time and Strong Customer Authentication (SCA) compliant account-to-account payments.
Industry analysts suggest that this partnership could accelerate the adoption of Open Banking payments in the UK.
TrueLayer: Expanding Open Banking in the UK
According to recent data from Open Banking Limited, the UK's open banking ecosystem now boasts over 7 million active users, with transaction volumes growing at an average rate of 15% month-on-month throughout 2023.
TrueLayer has been at the forefront of this growth, becoming the first UK Open Banking provider to deliver commercial Variable Recurring Payments (VRP) through an API.
The company reached a significant milestone last year, powering 1 million monthly VRP transactions – a clear indicator of the growing appetite for more flexible payment solutions.
Eileen O'Mara, Chief Revenue Officer at Stripe, adds: “We're thrilled to partner with TrueLayer to help British businesses selling high-value goods and services save tens of thousands of pounds in payment fees every month.”
The partnership is expected to particularly benefit sectors dealing with high-value transactions, such as luxury retail, travel and B2B services. These industries often grapple with significant card processing fees, which can eat into profit margins. But, by leveraging open banking technology, businesses can reduce these costs while offering customers a more streamlined payment experience.
However, the road to widespread adoption of Pay by Bank solutions is not without challenges. Consumer trust and familiarity remain key hurdles, with many still preferring the perceived security and rewards associated with credit card transactions. Education and user experience will be crucial factors in driving adoption.
Francesco Simoneschi of TrueLayer is, however, optimistic for the future: “This partnership with Stripe is just the beginning. We believe Open Banking payments have the potential to become the default way people pay online, offering a faster, more secure, and cost-effective alternative to traditional methods.
“As we continue to innovate and expand our offerings, we're excited to see how businesses and consumers alike will benefit from this transformation in digital payments.”
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