Sunday, June 16, 2024

TrueLayer Launches PayDirect, an Open Banking-Based Payment Method for Replacing Cards

TrueLayer, the leading technology company building financial infrastructure that’s open to everyone, today announced the launch of PayDirect, a new payments method enabling any firm to create streamlined, secure, and cost-effective onboarding and payments processes.

Today, identity and verification flows and card-based payments typically generate avoidable friction along the customer journey, affecting adoption and retention rates and generating unnecessary costs. The introduction of Strong Customer Authentication (SCA) this year, adds another layer of friction to cards with workarounds that deliver a poorer customer experience.

PayDirect is the answer to those issues, enabling firms to stay compliant, while delivering a frictionless customer experience. Built on open banking and the fastest available bank payment rails, it provides firms with instant payments and withdrawals, while accelerating KYC and AML processes, to deliver the most complete solution on the market.

“As customers experience seamless digital services in other aspects of their lives, their expectations for financial services are also changing. PayDirect builds on our payments expertise to further streamline onboarding, deposits, and withdrawals to deliver an experience that is fit for the digital age,” commented Ossama Soliman, Chief Product Officer at TrueLayer. “The ability to quickly and easily verify a customer’s identity, and move money instantly in and out of an account using bank to bank payments is hugely beneficial to both the customer and the service provider.”

With PayDirect fintech firms, banks, trading platforms, wealthtech firms, ecommerce providers, and iGaming operators, can deliver new levels of services to their customers, all from within their app, in a matter of minutes, through: 

  • Account verification – Instantly verify account ownership based on what’s on file at a customer’s bank.
  • Instant account funding – Users can initiate payments or move money between accounts effortlessly using open banking.
  • Seamless online payments – That reduce fraud and chargebacks at any checkout.
  • Instant withdrawals – Users can initiate payouts, using the same method used for deposits, automatically meet AML requirements, while avoiding manual data entry like a bank account number or IBAN.
  • Instant refunds – Providing customers to access their money faster, compared with up to 5 days using cards.

As a result, PayDirect improves customer experience and delivers a number of significant benefits, including:

  • Up to 3x faster onboarding: Research has shown 25% of customers abandoning the account opening process because it was too long or complicated. PayDirect gets customers up and running in a matter of minutes, using open banking and biometric authentication that removes the need for users to remember usernames or passwords.
  • Higher payment conversion rates:Once a user has successfully executed a deposit, payment failures tend to be four times lower with PayDirect than cards (on average cards fail up to 15% of the time vs 3.5% with PayDirect). This means more efficient deposits and, more importantly, less time managing failed payments that can ultimately lead to customer churn.
  • Increased customer loyalty: Card deposits take up to 3 days to settle, whilst withdrawals can take up to 5 days. PayDirect increases retention by offering customers what they want, instant deposits and withdrawals. Recent research by YouGov found that 25% of wealthtech customers would increase their deposits when they know they can also withdraw funds instantly.
  • Lower operating costs: PayDirect saves time and reduces cost by automating otherwise manual processes such as payment reconciliation or KYC checks. PayDirect also reduces costs when processing refunds, as they are automatically issued to the same bank account that was used to make the deposit. This reduces opportunities for human error compared to cheque or manual bank transfers as well as cutting down customer support cases on lost or never issued refunds.
  • Reduced risk and fraud: With PayDirect account ownership and authentication is handled by the customer’s bank. No more chargebacks, no credential sharing or password storage. Service providers can also meet AML requirements by paying out via the same method used for deposits.
  • A fully white labelled payment method: integrated open banking capabilities, increase customer trust by the brand owning the end-to-end customer journey, and configuring payment flows. 

The race is on to reimagine the way people pay by leveraging Open Payments architectures. We have seen in banking and ecommerce that great onboarding and payments experiences increase conversion, trust, and retention. But many payment journeys today have not been designed for a digital first world,” added Francesco Simoneschi, co-founder and CEO at TrueLayer.With PayDirect we’re calling time on cards and their monopoly. We have used our experience and expertise as a leading open banking platform to design a digital and mobile first payment product that combines instant bank payments with instant payouts, refunds and reconciliation capabilities. PayDirect delivers an effortless way to onboard new customers and enable them to quickly initiate payments and withdraw funds. It is the easiest way to create a better, safer and lower cost payments process.


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