Adyen launches Open Banking powered payment method
Adyen has unveiled a new service, pitched as an alternative to card transactions and which taps 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.
Launching initially in the UK (other European markets could possibly follow), 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 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.
“We constantly strive to innovate and simplify the payments process for consumers and merchants,” says Myles Dawson, UK Managing Director at Adyen. “Bank transfers between consumers and merchants are already extremely popular in mainland Europe because they offer greater fraud protection without adding friction to the payment process. We are excited to be the first payments provider to offer a fully-compliant, direct payment solution in the UK and it has been great to work with the Open Banking Implementation Entity to bring these benefits to consumers and merchants.”
Dutch airline KLM is the first major brand to roll-out the offering. “It is great to see that we are the first airline to offer this Open Banking payment option to our UK customers. After our home market, the UK is our most important foreign market,” says Pieter Groeneveld, Senior Vice President at KLM Royal Dutch Airlines.
“By working with Adyen’s latest payments initiative, we are offering our customers a wider choice of payment options in a secure and seamless way. Our customers can choose their preferred payment method whenever shopping online at KLM. This way, we remain our front-runner position in the online payment industry.”