Open banking enables bank-to-bank payments, which means that merchants should (in theory) be able to accept payments without having to pass fees to Visa or Mastercard or other payment providers like Stripe. However, the challenge is not just to implement open banking-based payments as a checkout option – there are already a multitude of open banking technology providers out there – but to convince customers to switch to a new payment option that they are likely to use are not familiar.
According to Fintech Trilo, the solution is to offer customers incentives to use open banking such as cashback or additional perks in connection with a user-friendly payment flow. The British startup breaks cover today with the launch of its Alpha.
"Companies lose so much of their hard-earned money every time they pay with cards that their transaction fees can be up to 4% in some cases," says founder Hamish Blythe when asked to define the problem Trilo wanted to solve. "(Also) it takes an age for companies to get their money, typically up to 7 days … thanks to cards that were invented in the 1950s before we even went to the moon."
Open banking-based payments not only provide an opportunity to break down the Visa / Mastercard duopoly, but should also reduce card-related fraud, resulting in lower costs for merchants beyond transaction fees alone and fewer problems for the Consumer. However, this requires the use of the new payment option.
"Open banking is great. However, you and me, the consumers, have little to no reason to use it," argues Blythe. "Without a fun, rewarding, and easy user flow it will be very difficult to get away."
To address this, Trilo is combining an open API for bank payments with incentives and rewards for consumers who choose to make bank-to-bank payments. The startup also removes transaction fees for merchants and instead charges a monthly subscription that is similar to a SaaS model.
"Say goodbye to transaction fees, we've scrapped them," says Blythe. “Our dealer partners receive their money on average in 5 minutes, so that they can make it available again even faster. (And) consumers get a boost when you pay. Our main focus is that we focus on you to make your time as comfortable, easy and rewarding as possible. Whether this is a 1% discount, a free beer, or an upgrade, companies are giving you a serious reason not to use your card anymore. "
According to Blythe, open banking offers a startup like Trilo the opportunity to take over the "largest duopoly in the world".
"But to do that we have to have the easiest and easiest way to pay for you and me," he says, "and also provide a serious setback for consumers when they pay." With our network, we can also offer refunds, consumer protection and all sorts of other perks that pure open banking just doesn't offer. "
To pay with Trilo, simply scan a QR or tap the Trilo button on a partner retailer's website or app. They are saved on your phone with a cookie and then see who you are paying, which bank and what your boost is. The amount to be paid is clearly shown below. "When you tap Pay, you switch to your banking app and you can securely complete the payment with one tap on the screen," explains Blythe.
To start Trilo's Alpha and demonstrate the flow of payments, Trilo is partnering with Make It Wild, which is reforesting large parts of the UK to help restore the natural ecosystem. "With our Alpha you can finance a tree for a fiver with Trilo, and the best part is that with Trilo every single cent goes to the trees," adds the Trilo founder.