Open banking is creating new payment rails that challenge traditional card networks, especially in Europe where interchange caps have accelerated innovation. As fintechs develop account-to-account payment solutions that bypass cards altogether, companies like Trustly are gaining momentum by offering faster, lower-cost payment options. Its planned public listing highlights growing investor confidence in alternative payment methods and raises an important question: can the U.S. payments market continue to resist the shift toward open banking-powered payments?
An increasing number of Fintechs are creating alternative payment rails utilizing the Open Banking infrastructure mandated in the EU. With interchange capped in the EU financial institutions seem less resistant to this approach as we identified earlier with BNP Paribas and Token deploying a new payment method called Instanea built on the infrastructure. Now comes Trustly.
Will the US market be able to resist:
“STOCKHOLM, April 12 (Reuters) – Swedish payments firm Trustly said on Monday it intends to list its shares on the Nasdaq Stockholm exchange, the latest in a line of major European tech unicorns seeking a stock market listing.
The deal could see the company valued at around 9 billion euros ($10.70 billion), based on the middle of a range of analyst views on the company seen by Reuters and confirming a Reuters report https://www.reuters.com/article/us-trustly-ipo-idUSKBN29R0YY from earlier this year.
That would be around 60 times Trustly’s expected core 2022 earnings, a discount to peer Adyen which trades at 72.5 times but a premium to Nuvei, which trades at 30.5 times.”
The article continues:
“Other European fintech firms such as Wise and Klarna are also planning for stock market listings.
“This is sort of a process that we have been working on for a year now to prepare the company and make it ready for the public markets,” Trustly Chairman Johan Tjärnberg said.
Trustly had also assessed a listing in the United States and might look at a dual listing in the future, he said.
Founded in 2008, the company counts PayPal, Wise and Facebook among its customers. Its platform allows users to pay for purchases directly through their bank accounts, bypassing the need for a debit card or a mobile wallet.”
Trustly’s IPO plans underscore the growing importance of alternative payment rails in the global payments ecosystem. As European fintechs continue to expand account-to-account payment solutions, financial institutions and merchants will increasingly evaluate alternatives to traditional card-based payments. Whether the U.S. embraces these models as quickly as Europe remains uncertain, but the momentum behind open banking payments continues to build.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
