We have the pleasure to interview Lassi Eronen, e-Commerce Marketing Manager at Trustly, a European fintech company that provides direct payments technology to make online payments fast, simple and secure.
1. Can you tell us more about Trustly? What does the company do and what are your main markets?
At Trustly, we’re passionate about simplifying the way people pay and get paid online. We are a licensed payment institution and our fast online bank payments and refunds attract global merchants in segments such as e-commerce, travel, financial services and gaming. We currently offer our payment solutions in 29 European countries and we see the strongest traction in our home market of the Nordics.
2. Who do you see as your main competitors? What sets you apart from them?
Our main competitors are any payment methods that sit alongside us in the checkout, whether they are credit cards, invoice solutions or e-wallets. From the merchant’s perspective, online bank payments are often less expensive than accepting credit cards and are instant, which helps to manage cash flow.
A full-service bank payment solution like Trustly also allows e-commerce merchants to offer instant refunds. Whereas shoppers might wait anywhere from 3 to 10 days to receive a refund from a credit card, Trustly enables automated and instant refunds. Not only does this cut down on costs associated with handling refunds, but it reduces complaints to customer support, increasing shopper satisfaction. And when shoppers receive their refunds faster, they are able to spend those funds sooner. In fact, a recent survey we conducted shows that offering faster refunds could lead to 58% of shoppers spending more and 56% shopping more frequently. On top of that, 95% of shoppers said they would be more loyal to a merchant that offers same-day refunds.
But while price, speed and ability to offer instant refunds give online bank payments a leg up over other payment methods, we feel it’s important to have a mix of options in the checkout in order to optimize conversion.
3. What does an optimized checkout look like?
Offering a mix of payment options is crucial to optimizing conversion in the checkout, although what that looks like can differ for merchants depending on the markets they cater to. For example, for a merchant serving the Nordics, it’s important to offer online banking payments because in Finland, for example, roughly 40% of shoppers prefer to pay directly from their online bank. But in the US, which is still largely dominated by credit cards, it’s important to offer that option.
Beyond offering local payment options, an optimized checkout can also be personalized for the shopper, which means using their local language and currency. And just as shoppers feel more comfortable in a brick and mortar store where the sales associate says “Welcome back,” return shoppers online appreciate a streamlined experience in which payment or shipping details are remembered. Localizing and personalizing your checkout for the markets you operate in is key to optimizing your conversion.
4. What trends are you noticing in the payments industry at the moment?
Across all industries, consumer expectations are rising. Consumers expect to be able to watch anything or listen to anything they want on demand, and they expect to be able to order something online and have it delivered to their door in just a day or two. This extends to payments, where consumers expect to be able to pay quickly and, should they need to make a return, receive their refund just as quickly. That trend is driving the need for instant and real-time payments. Anything slower just doesn’t cut it anymore.
New regulations are also driving the change in Europe currently. With PSD2, doors are opening for fintechs to offer new and innovative services that address the consumer expectations mentioned above. One of the key opportunities is combining payment with other components like personal data, which can power completely new kinds of services. Just imagine payments that are embedded to other consumer services, like messaging apps!
5. With PSD2 to be deployed later this year, as a Third Party Provider (TPP), what are some of the challenges you foresee? How is Trustly going to tackle these challenges?
Trustly’s existing operational model is fully PSD2 compliant and the directive endorses the benefits of our payment initiation service, allowing consumers to transmit their bank-issued credentials through Trustly. A big challenge will be integrating all the new bank APIs as they become available. However, we already use API or quasi-API solutions across multiple European banks, some of which are built exclusively for Trustly. So we have significant practical experience in integrating these type of interfaces.
But it’s important to note that not all bank payments are equal, and PSD2 APIs will only solve a part of the puzzle. In order to create true payment experience across Europe, you will still have to be an expert in all kinds integration methods. This is where Trustly is clearly the leader and we have spent 10 years learning how to make this work.
We also play an active role in the vetting of APIs being developed by banks through our participation in the European API Evaluation Group. This gives us in-depth knowledge of the banks’ plans in regards to APIs – where different banks are in their development, as well as where national initiatives are (e.g. STET in France, Polish API, Open Banking UK, Czech API etc). For several of these API initiatives, we have even participated in consultations by providing feedback, putting us in a unique position to integrate new APIs quickly.
6. What’s up next for Trustly? Are you planning to release any new products or expand into new markets?
We’ve just released our latest product, Pay Your Invoice, which simplifies and automates invoice payments. For e-commerce merchants, it decreases administrative costs while letting them maintain ownership of the customer relationship, which is a major benefit over some of the existing invoice solutions.
As for new markets, we are focused on providing the best online bank payment product in Europe and are constantly working on improving the coverage and offering there. However, many of our merchants have a global presence and in order to serve them better, we are looking at new markets to enter. Stay tuned for more news on that soon!
About Lassi Eronen
Lassi Eronen is passionate about developing businesses, learning, technology and helping people along the way. At Trustly, he works as a Business Marketing Manager for the E-Commerce and Travel verticals, helping European merchants improve their customer experience by offering direct bank payments
Trustly is a European fintech company that makes online banking payments fast, simple and secure. We cover 29 European countries and our payment solutions attract global merchants in e-commerce, travel, financial services and more. We are a licensed Payment Institution under the supervision of the Swedish Financial Supervisory Authority.