“Merchants across Europe are enjoying a significant spike in online sales, but accepting payments without a local presence is no easy ride,” says Ciaran O’Malley, Trustly’s VP of Partnerships. Open Banking Payments are designed to enable merchants to grow their customer bases without added costs or roadblocks.
When Open Banking was introduced in the 2010s the aim was to encourage innovation in a sector that was not moving with the times. Since then, the Financial Services industry has evolved quickly to meet the increased demands of digital-savvy consumers and businesses, but one area where it falls short is cross-border payments.
67% of Europeans will shop online in 2025
Digitalization has broken down many borders for merchants who want to reach an international customer base and for shoppers who want better deals. According to Statista research, 7% more Europeans will shop online in 2025. That is the equivalent to the entire population of Poland being added to the online ecommerce market over the next 4 years!
The demand is clear. Accepting payments and making refunds across borders, however, is still complicated, despite attempts to harmonize in Europe. Merchants need to offer a diverse range of local payment methods to address each country's specific preferences. Data from FTI Consulting shows 48% of Europeans say that they prefer to pay with familiar/local payment methods. Delivering the right payment methods will maximize conversion, but merchants should be mindful of the potential for costs to spiral.
Open banking payments (also known as Account to Account) have excited the payments and ecommerce industry for over a decade. They offer a fast and convenient payment method for consumers, with merchants receiving faster settlement and no chargebacks. Yet they are notoriously difficult to get right in the cross border arena.
Trustly has developed Open Banking Payments to eliminate the hassles of cross-border payment acceptance. The unique model of collecting funds and reconciling payments in each country means merchants can focus on expansion and revenue growth, rather than local legal entities and bank accounts.
Why Open Banking struggles cross border
To process cross-border payments, merchants must connect with local acquirers, local payment methods and domestic schemes in each country. They may even be required to have an employee in the country full time.
Most Open Banking APIs “out of the box” can’t process international payments. Those that can often charge the customers and so it’s not a viable experience from a consumer perspective. On top of this merchants frequently face settlement delays, FX fees and blocked payments. That's all before we consider the challenge of merchants processing cross border refunds.
How Trustly delivers
Trustly offers Open Banking Payments that are embedded into the flow of funds, locally in every country. We not only initiate payments, but also receive and settle funds locally and instantly. Trustly provides full and instant reconciliation funds through our API or integrated with a PSP, local liquidity management, real-time FX conversion, and transaction risk reduction.
We enable merchants to manage their liquidity across borders and give customers the opportunity to pay in their local currency – while merchants receive it in their preferred currency.
Scalable payments solutions for better customer experiences
Think of Trustly as a full service Open Banking provider that can be plugged into any platform or PSP that a merchant wants to use. We help merchants deliver great customer experiences to increase conversion without added costs. With Trustly’s scalable solutions, merchants can expand to new markets without the need for local entities or local bank accounts.
We’ve only scratched the surface in this article. If you want to know more about how Open Banking Payments can support you in reaching a new customer base, we’re here to help.