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Truelayer launches closed-loop payment product in Europe

Rising card fraud, costs for merchants, and waiting times for refunds and withdrawals have prompted the launch of the fintech’s latest open banking product.

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Francesco Simoneschi/Truelayer

European open banking platform, Truelayer, has launched a closed loop payments product in Ireland, France, Germany, Spain, Lithuania and the Netherlands, which it claims will be “more cost-effective, frictionless and secure”.

The company says the new product has been launched to address rising card fraud, for which losses totalled €1.55bn in 2020, with France, Germany and Spain all ranking within the top five.

Truelayer added that merchants were struggling to manage interchange fees, chargeback penalties and manual tracking processes, as well as long waiting times for refunds and withdrawals which affected both businesses and consumers.

The new closed-loop payments product claims to address these points by introducing instant pay-ins, instant withdrawals and refunds, and dedicated merchant accounts.

“With a single implementation, our platform delivers instant deposits, withdrawals, and refunds,” said Till Wirth, head of product at Truelayer. “Instant deposits enable our customers to achieve higher conversion rates, which improves customer acquisition.”

“Instant withdrawals and refunds lead to improved customer retention and loyalty as customers can see the instant transfer of funds with minimal fuss or having to chase support teams asking where their money is,” he continued. “In contrast, settlement and refunds with cards often takes three days or more.” 

Truelayer says its payments solution is now the “most comprehensive in the market”, boasting improved checkout processes, fewer abandoned payments, as well as reduced costs and potential for payments fraud.

The ability to instantaneously transact is one of the biggest draws for customers, according to the company.

“YouGov research found that 37 per cent of investors said they would increase their deposits and 46 per cent would switch providers, if the investment platform also allowed them to withdraw their funds immediately,” said Wirth.

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