TrueLayer Raises $130m to Accelerate Open Banking Payments
The round forms part of the recent tsunami of investor interest in open banking, the infrastructure that allows banking data to be shared with third parties and underpins account to account payments.
TrueLayer is a fintech company that helps software developers build their financial applications by providing abstractions and connections to banks and financial institutions worldwide. This is done via an application program interface (API), which offers third-party fintech and payment providers an easy way to integrate their digital services with banks securely and safely. Among its most notable customers, we have Revolut and Freetrade. TrueLayer recently received Central Bank of Ireland authorization as a payments institution and is establishing its European headquarters in Dublin.
In January 2020, TrueLayer closed a deal with the British Government to allow any state department to use Open Banking to accept payments. Consequently, we could most probably pay for passports, driver's licenses, and so on via Open Banking in the upcoming future. Aside from this, it will be possible, for instance, to fund an investment account directly from my bank account.
As of today, the European Open Banking landscape is fragmented. If we take the two payments network giants, Visa and Mastercard, we see that the former has acquired Tink while the latter owns the UK real-time payments rail (Vocalink), and acquired Aiia, a Nordic Open Banking Provider. TrueLayer has dominated in the UK but followed some of its clients (like Revolut) into other markets. As a result, Europe’s open banking payments space is getting competitive, with TrueLayer now up against several established players, including $13bn American giant Plaid.
The use cases for open banking as a rail are much more exciting than cards because they combine data and payment. Aside from the fact that Open Banking is a cheaper rail than cards, there are enormous potentials for what Open Banking can revolutionize. At a minimum, it can improve checkout conversion experiences. However, it's reasonable to expect exotic use cases, like powerful BNPL features or tailored rewards programs.
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The Banq team