Netherlands-based payments platform Adyen has launched a new payment service powered by Open Banking.
The new service is an alternative to card payments and takes advantage of the European Union’s Payment Service Directive (PSD2) requirement for banks to create APIs for approved third parties to initiate payments on behalf of consumers. Adyen is one of the early adopters to launch a PSD2 API payment method that provides direct APIs into leading UK banks – delivering access to more than 90% of consumer accounts in the UK.
Adyen’s new solution has been launched initially in the UK, but with scope to be rolled out into other European markets as well. With it, Open Banking payments are authenticated directly between consumers and their banks; thus, merchants can avoid chargebacks generated due to fraud or an inability to capture funds.
The solution works in a similar way to most online banking methods. A customer selects the payment type during the checkout process, at which point they are redirected to their bank’s online banking environment to securely confirm the payment. Their bank utilises the customer’s preferred method of authentication – such as Face ID, Touch ID fingerprint recognition, or an online banking password – which enables the funds to be pushed directly from the consumer. This facilitates direct authorisation between the shopper and the merchant, and Adyen handles the payment flow between the bank and the merchant.
Dutch airline KLM is the first brand to roll out the new offering – the service is now live for its UK customers. For more information about Adyen, please check out a detailed profile of this company in our dedicated, industry-specific online company database.