Streamlining Payments: How Open Banking and Autogiro are Reshaping the U.S. Financial Landscape
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Trustly, a leading global payments platform, has partnered with Kivra, a Swedish digital mailbox provider, to launch a groundbreaking automatic payments solution called Autogiro.This partnership, announced on February 10, 2025, aims to revolutionize the way Americans make and receive payments, leveraging the power of open banking and simplifying the payment process.
“Trustly is driving the development of open banking on a global scale, and Sweden—with its world-class fintech sector—is the perfect market to test new innovations,” said Trustly CEO Johan Tjärnberg. “Together with Kivra, we look forward to setting a new standard for the future of payments.”
Autogiro streamlines automatic payments by allowing users to register direct debit with a simple BankID confirmation. This eliminates the traditional hurdles associated with setting up recurring payments,making the process more convenient and accessible.
For businesses, Autogiro offers significant advantages. “The solution can lead to more on-time payments, lower the administrative workload, and improve the customer experience,” according to a news release. By automating payments, businesses can reduce manual processing, minimize late payments, and free up valuable resources.
Open Banking: A Game Changer for U.S. Payments
The autogiro solution is built on the foundation of open banking, a rapidly growing trend that allows consumers to securely share their financial data with third-party providers. While open banking has gained significant traction in countries like the UK and Hong Kong,its potential in the U.S. is only beginning to be realized.
“It’s still very nascent, particularly in the U.S.,” said Adam D’arcy, Trustly’s Chief Product Officer, in a recent interview with PYMNTS. ”The need for standardization and broader consumer education before such integrations become widespread.”
Despite its early stages, open banking is poised to transform the U.S. payments landscape. By providing consumers with greater control over their financial data and empowering them to choose the payment methods that best suit their needs, open banking is paving the way for a more innovative and inclusive financial system.
Pay by Bank: A Complementary Force in the Digital Wallet Ecosystem
Pay by bank, a payment method that allows consumers to make purchases directly from their bank accounts, is expected to play a significant role in the evolving payments ecosystem. Trustly believes that pay by bank will complement,rather than compete with,existing digital wallets like Apple Pay and Google Pay.
“Pay by bank is positioned to complement — and not compete with — payment methods such as digital wallets,” D’arcy explained.He envisions a future where digital wallets incorporate pay-by-bank functionality, similar to how they have integrated buy now, pay later (BNPL) offerings.
This integration would provide consumers with a wider range of payment options and enhance the convenience and versatility of digital wallets.
Practical Applications for U.S. Consumers
The Autogiro solution and the broader trend of open banking offer several practical benefits for U.S. consumers:
Simplified Bill Payments: Autogiro eliminates the hassle of manually entering payment data for recurring bills, reducing the risk of late payments and associated fees. Enhanced Security: By using BankID for authentication, Autogiro provides a secure and reliable way to manage payments. greater Control: Consumers maintain full control over their payments with notifications and spending limits.
Increased Financial Transparency: Open banking empowers consumers to access and manage their financial data more effectively,promoting financial literacy and informed decision-making.
looking Ahead: The Future of Payments in the U.S.
The partnership between trustly and Kivra, along with the growing adoption of open banking, signals a significant shift in the U.S. payments landscape. As consumers become more comfortable sharing their financial data and embracing innovative payment solutions, we can expect to see a continued evolution towards a more seamless, secure, and personalized payment experience.
The Future of Payments: A Revolution Driven by Collaboration and Innovation
The payments landscape is undergoing a dramatic transformation, fueled by technological advancements and evolving consumer expectations. “Pay by bank,” a method allowing consumers to make payments directly from their bank accounts, is poised to become a dominant force, reshaping the relationships between banks, FinTechs, and merchants.
This shift is not merely about convenience; it represents a essential change in how we transact. As PYMNTS noted, “Pay by bank” will ultimately transform the relationships between banks, FinTechs and merchants. [[1]]
This article delves into the key drivers behind this revolution, explores its implications for various stakeholders, and highlights practical applications that are already shaping the future of payments in the U.S.
the Rise of “Pay by Bank”: A Consumer-driven Demand
The increasing popularity of ”pay by bank” is driven by several factors:
Security: Consumers are increasingly concerned about data breaches and online fraud. “Pay by bank” offers a secure choice, as it eliminates the need to share sensitive card information with merchants.
Convenience: Direct bank transfers are frequently enough faster and more convenient than traditional payment methods, especially for recurring payments.
Transparency: Consumers appreciate the clarity and transparency of “pay by bank” transactions, as they can easily track their payments and account balances.
Impact on Banks, FinTechs, and Merchants
This shift towards “pay by bank” presents both opportunities and challenges for different players in the payments ecosystem:
Banks: Banks have a unique opportunity to leverage their existing infrastructure and customer relationships to offer seamless “pay by bank” solutions. This can enhance customer loyalty and drive new revenue streams. Tho, banks must also invest in updating their systems and complying with evolving regulations.
FinTechs: FinTech companies are at the forefront of innovation in the “pay by bank” space. They are developing innovative solutions that integrate with existing banking systems and offer enhanced features, such as real-time payment processing and personalized financial management tools.
Merchants: Merchants benefit from increased customer satisfaction, reduced transaction fees, and improved fraud prevention through “pay by bank” options.
Collaboration is Key
As PYMNTS highlighted, “While large banks may find the cost of compliance manageable, smaller institutions could face challenges. Collaboration with third-party providers will be essential to navigate thes hurdles and unlock new opportunities.” [[1]]
This emphasis on collaboration is crucial for the successful adoption of “pay by bank.” Partnerships between banks, FinTechs, and merchants will be essential for developing and implementing innovative solutions that meet the evolving needs of consumers.
Real-World Examples and Practical Applications
The “pay by bank” revolution is already underway in the U.S. Here are some examples:
Plaid: This FinTech company provides APIs that allow businesses to connect with consumers’ bank accounts, enabling seamless “pay by bank” transactions.
Stripe: This popular payment processing platform has integrated “pay by bank” options, allowing merchants to offer this convenient payment method to their customers.
PayPal: PayPal has expanded its offerings to include “pay by bank” options, leveraging its existing user base and infrastructure.
The Future of Payments: A More Inclusive and Secure Landscape
The rise of ”pay by bank” has the potential to transform the payments landscape in the U.S. by:
Increasing financial inclusion: “Pay by bank” can provide access to financial services for individuals who may not have traditional bank accounts or credit cards.
Enhancing security: By eliminating the need to share sensitive card information,”pay by bank” can reduce the risk of fraud and data breaches.
Driving innovation: The “pay by bank” revolution is spurring innovation in the payments industry, leading to the development of new and improved solutions.
As consumers continue to demand more secure, convenient, and transparent payment options, “pay by bank” is poised to become a mainstream payment method in the U.S. The collaboration between banks, FinTechs, and merchants will be crucial for unlocking the full potential of this transformative technology.
Interview with Adam D’arcy: Disrupting U.S. Payments with Open Banking adn Pay by bank
PYMNTS: Adam, thanks for joining us today. Let’s dive into the increasingly important topic of open banking and its impact on payments in the U.S.
Adam D’arcy: Definitely, it’s an exciting time in the industry.
PYMNTS: From your perspective as Trustly’s Chief Product Officer, how would you characterize the state of open banking in the U.S. compared to other regions?
Adam D’arcy: You’re right, it’s a hot topic. It’s still very nascent in the U.S.,notably compared to Europe. We’re seeing movement, but we need standardization and broader consumer education before thes integrations become widespread.
PYMNTS: What are the biggest challenges hindering broader adoption of open banking in the U.S.?
Adam D’arcy: There are several. First and foremost, we need clear regulatory frameworks that foster innovation while ensuring consumer data security. Secondly, consumer awareness of what open banking can offer them is still low. We need to educate consumers on the benefits of sharing their data safely and securely.
PYMNTS: Trustly is heavily involved in the pay by bank space. How do you see pay by bank evolving in the U.S. payments landscape?
Adam D’arcy: Pay by bank has immense potential. It’s a secure, convenient and transparent option that caters to consumer demands. We see it complementing existing digital wallets, not competing with them. Imagine digital wallets integrated with pay by bank functionality like we’ve seen with BNPL.
PYMNTS: What are the practical applications of open banking and pay by bank that U.S.consumers can look forward to?
Adam D’arcy: Think simplified bill payments that eliminate manual entry and the risk of late fees. Enhanced security with BankID-based authentication.Greater control over your finances with customizable notifications and spending limits, and increased financial transparency as consumers can easily access and manage their data.
PYMNTS: Looking ahead, how do you envision the future of payments in the U.S.?
Adam D’arcy: It’s going to be driven by collaboration and innovation. We’ll see tighter partnerships between banks, FinTechs, and merchants. Consumers will demand seamless, secure, and personalized experiences. And technology will continue to evolve, unlocking new possibilities for the future of payments.
PYMNTS: Exquisit insights, Adam.Thank you for your time.
Adam D’arcy: My pleasure.