UK fintechs have been busy innovators in recent years but TrueLayer's new Payments API is hoping to spearhead a brand new wave of digital disruption

TrueLayer Mobile

TrueLayer mobile payments (Credit: TrueLayer)

London fintech TrueLayer has launched a digital payments tool designed to help financial service innovators develop products compatible with UK open banking rules.

The Payments API has been developed to support fintech companies working within the UK’s new regulatory framework to create new ways for businesses and individuals to digitally use and manage their finances.

What is the new TrueLayer digital payments API?

APIs (application programming interfaces) are fundamental to open banking innovation.

They create the digital communications channel through which third-party providers (TPPs) and banks can interact with each other and share customer transaction data.

TrueLayer’s new API is built around open banking regulations, which were introduced in the UK last year to comply with an EU directive aimed at promoting competition and modernisation across financial markets.

The new rules make it easier for fintechs – the TPPs – to develop innovative online banking products to meet growing consumer demand for alternative online payment methods.

TrueLayer’s co-founder and CEO Francesco Simoneschi said: “Companies often throw out cliches such as ‘game-changing’ or ‘disruptive’ when they launch a new product, but in this instance we are looking at a very meaningful and very important innovation.

“It puts the banks back at the centre of the payment process, allowing them to create competitive and differentiated payment experiences as well as enabling entirely new opportunities for deeper purchase flows into the banks’ mainstream digital channels.

“For fintech applications and merchants, payments initiation fills a huge gap in the European payments market for use cases that are currently largely underserved by traditional payments products.”

Mobile payments

The Payments API is compatible with all major UK banks – including the nine largest institutions which are all compliant with open banking regulations.

Key features include the immediate transferring of funds, anti-fraud technology and low transaction fees.

TrueLayer plans to launch an updated version of the product later this year that will incorporate additional features such as future-dated payments, standing orders and batch payments.

Mr Simoneschi added: “When open banking was launched this was the development many people in the financial industry were waiting for.

“It is a new form of online payments that will add much needed competition and open the door to range of innovative applications.”

Who does TrueLayer work with?

Private beta testing of the Payments API was completed prior to launch, and involved a number of fintech start-ups – including Moneyfarm and WealthKernel.

WealthKernel CTO Joe Campbell said: “TrueLayer’s new API will enable our clients to quickly build products and services that offer a highly secure fully integrated payments experience.

“This is an incredibly important step in the realisation of open banking’s potential.

“It provides a vehicle for a host of new applications to enter the market which will vastly improve how financial services work for businesses and consumers.”

In the last 12 months, TrueLayer has sealed a number of new business partnerships, with Zopa, ClearScore, Canopy and Emma among the names it has collaborated with.

Since it was founded in 2016, the firm has secured $11.9m (£9m) in investments from venture capital funds including Northzone, Anthemis Group and Connect Ventures.