Digital Payments

Adyen Launches Direct-To-Merchant Payment Service

Online Banking

Adyen, the payments platform, announced Wednesday (Feb. 20) it has launched a new payment service that is powered by open banking.

In a press release, the company said it launched an alternative to card payments that takes advantage of the European Union’s Payment Service Directive (PSD2) requirement for banks to create APIs for third parties to initiate payments on behalf of consumers. Adyen said it is one of the early adopters to launch a PSD2 API payment method that provides direct APIs into leading U.K. banks. The company said it now delivers access to more than 90 percent of consumer accounts in the U.K.

“Adyen constantly strives to innovate and simplify the payments process for consumers and merchants,” said Myles Dawson, U.K. Managing Director of Adyen, in the press release. “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.”

The new payment service is being launched in the U.K. first, with plans for it to be rolled out into other European markets in the future. Open banking payments are authenticated between consumers and their banks, which means merchants can avoid chargebacks that are generated because of fraud or because the funds couldn't be captured. The service works similar to other online banking methods in that a customer selects the payment type during checkout and is then redirected to their bank's online banking environment to confirm the payment. The bank uses the customer's preferred method of authentication, whether it is face ID, touch ID or an online banking password which enables the funds to be sent directly from the consumer. Ayden handles the payment flow between the bank and the merchant.

“It is exciting to see another great example of open banking powering innovation and leading to new services which ultimately help drive efficiencies in payments,” said Imran Gulamhuseinwala, OBE, trustee of the Open Banking Implementation Entity, in the press release. “Using Open Banking, Adyen is a great example of how consumers and organisations can benefit from increased collaboration and secure data sharing between financial institutions.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.