One of the top payment methods Adyen, the Ayden payments platform has announced and reviled that it has launched a new payment service that is powered by open banking. In a press release, the company said it launched an alternative to card payments that takes advantage of the European Union’s Payment Service Directive (PSD2) requirement for banks to create APIs for third parties to initiate payments on behalf of customers.
Adyen said it is one of the early adopters to launch a PSD2 API payment method that provides direct APIs into leading U.K. banks. The company said it now delivers access to more than 90 percent of consumer accounts in the U.K. Adyen constantly strives to innovate and simplify the payments process for consumers and merchants,” said Myles Dawson, U.K. Managing Director of Adyen, in the press release.
Bank transfers between clients and merchants are already very famous in central Europe because they offer greater fraud protection without adding friction to the payment process. We are happy to be the first payments provider to offer a fully-compliant, direct payment solution in the UK and it has been great to work with the Open Banking Implementation Entity to bring these benefits to consumers and merchants.”
The new payment service is being launched in the U.K. first, with plans for it to be rolled out into other European markets in the future. Open banking payments are authentic between customers and their banks, which means merchants can avoid charge backs that are generated because of fraud or because the funds couldn’t be captured.
The service works similar to other online banking methods in that a customer selects the payment type during checkout and is then redirected to their bank’s online banking environment to confirm the payment. The bank uses the customer’s preferred method of authentication, whether it is face ID, touch ID or an online banking password which enables the funds to be sent directly from the consumer. Ayden handles the payment flow between the bank and the merchant.
It is stirring to see another great example of open banking powering innovation and leading to new services which ultimately help drive efficiencies in payments, said Imran Gulamhuseinwala, OBE, trustee of the Open Banking Implementation Entity, in the press release. “Using Open Banking, Adyen is a great example of how consumers and organizations can benefit from increased collaboration and secure data sharing between financial institutions.”