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Payments provider Trustly has continued its UK expansion by launching Open Banking functionality with Betway.

Trustly’s Open Banking product is already in use at major UK operators including Entain, Flutter, Kindred and 888 and has been expanded to include the flagship Super Group brand.

Following the recent acquisition of UK-based Open Banking Platform Ecospend, Trustly expects accelerated growth in the region.

Trustly VP of gaming Vasilije Lekovic said: “We are very pleased to extend our long-time partnership with Betway to the UK market as well.

“The shift from traditional payment solutions, such as cards, towards account-to-account payments in the UK started last year and continues to accelerate, and we expect that user adoption rates will continue to grow.

“Trustly is in a great position to lead this growth, offering a frictionless payment experience that allows users to deposit directly from their mobile banking app using biometric verification, as well as an unparalleled reconciliation, reporting and risk management platform that will help our gaming merchants lower their operational costs,” he added.

Trustly VP of gaming Vasilije Lekovic: “The shift from traditional payment solutions, such as cards, towards account-to-account payments in the UK started last year and continues to accelerate.”

According to Trustly, account-to-account payments in the UK market have grown in popularity over the last 12 months, surpassing five million consumers.

Betway marketing and operations director Paul Adkins said: “We’re very excited to have added Trustly to our bank of payment methods for Betway in the UK.

“As open banking is becoming more popular in this country, we wanted to find a partner whose banking solutions offered our customers a seamless experience, which is important for us as one of the UK’s leading operators.

“Staying up to date with the latest payment methods is vital for our UK business, and we’re looking forward to working together with Trustly with the sole aim of achieving the best open banking experience for our customers,” he added.

Since launching account-to-account payments in 2008, Trustly has seen significant success in the Nordics as well as Germany and the Netherlands.

More recently, the company has continued its product expansion into other markets in Europe, as well as the US and Canada.

The Swedish Financial Supervisory Authority (FI) has taken serious action against Trustly by imposing a SEK130m (€12.3m) fine on the Stockholm-based payments provider.

An FI investigation into Trustly’s operations across the online gambling industry between January and August 2020 unveiled non-compliance with the country’s anti-money laundering (AML) framework, as well as multiple breaches in its risk assessment and customer due diligence procedures.

The violations – described as severe by FI – include a failure to identify customers of the company as required under Sweden’s Anti-Money Laundering Act, because it did not classify end-users as customers.

These consumers were likely classified by Trustly as customers of its operator clients.

“A key issue for the supervisory case has been Trustly Europe’s updated interpretation of the regulatory framework that end users, i.e. consumers who pay with Trustly’s service, should not be treated as customers of the company, but as customers of the merchants to whom the company’s services are provided,” said Trustly in response to the ruling.

“The end users who pay with Trustly have already undergone the usual customer due diligence measures carried out by their respective banks.”

This meant the provider failed to include a large portion of its customers, as defined by the FI, in measures to prevent money laundering and terrorist financing.

Gambling is one industry associated with a high risk of money laundering and terrorist financing according to FI, which noted that more than half of Trustly’s total transaction volume was derived from the gambling sector during the investigation period.

“Trustly’s role in the payment chain between the gambling industry and a large number of banks makes it possible for the company to see flows that are not available to other market participants,” said FI director general Erik Thedéen.

“A company that has chosen fast and simple as its business concept in the gambling industry needs to be very thorough in its work to prevent money laundering. We have identified in our investigation that this has not been the case,” he added.

The regulator ruled there had been considerable risk of Trustly and the financial system being used for for money laundering and terrorist financing and therefore imposed an administrative fine of SEK130m and issued a warning, before instructing Trustly to address the deficiencies.

FI suggested some of the breaches were enough to consider withdrawing Trustly’s authorisation in Sweden, but that its pledge to address the deficiencies and comply with the regulations in future meant that a warning and a fine were sufficient in this scenario.

Trustly said it has already started to adapt its services to meet the FI’s previous interpretation of who should be treated as a customer in Europe.

Johan Tjärnberg, CEO of Trustly, said it was good to finally have clarity over who the FI believes should be treated as a customer.

“Trustly will always strive to fully comply with both the applicable regulatory framework and our own high standards, and takes the FI’s decision very seriously,” he said. “In November 2021, we started to adapt our services based on the preliminary assessment from the FI regarding the end-user issue.

“We also deeply value our relationships with merchants, banks and other stakeholders and will continue to engage in an active dialogue with several of them to further explain our undertaken and planned actions in the fight against money laundering and terrorist financing, and how we ensure that Trustly remains the most trusted and secure platform for digital account-to-account transactions,” he added.

Trustly offers a frictionless payment technology solution to four main sectors, including iGaming, e-commerce, travel and financial services.

It was founded in 2008 and boasts more than 6,000 connected banks, 8,000 connected merchants and consumer reach in excess of 525 million.

Its iGaming-specific solutions include instant deposits, instant withdrawals, KYC verification and Pay N Play functionality, which is popular in the Nordics and lets consumers play instantly on their preferred brands by combining the deposit and registration process.

Trustly counts FanDuel, DraftKings, Kindred Group and LeoVegas among its gambling industry clients.

Last year, Trustly was forced to postpone a $9bn stock market listing after Swedish regulators raised concerns about its lack of due diligence on end customers.

Commenting on the FI enforcement action, Trustly said it has since strengthened the organisation in several ways to enhance the company’s procedures for risk management and compliance.

It has established a new function called AML Governance and has also appointed Josefin Lindstrand as a board member and chair of the group’s Global Risk Committee, as well as Rob Thacker as compliance and risk officer and Johanna Vikström as head of compliance for Europe.

Trustly chairman Johan Tjärnberg will become the company’s new chief executive in January when current CEO Oscar Berglund takes over the chief business development officer role.

The Trustly board has decided to appoint Tjärnberg to the top job from 17 January, when he will be replaced as chairman of the board by current board member Fredrik Näslund, who is also a partner at Nordic Capital Advisors.

Berglund, who has served as CEO since September 2016, said the time was right to step down because Trustly had become an “increasingly large, global and complex company”.

Berglund said evidence of this was the fact that North America now represents close to half of the payments provider’s total group revenue, compared to just one fifth a year ago.

Trustly said Tjärnberg was the ideal candidate to take over as he has experience in scaling global payments businesses, as well as an impressive track record of innovation within the payments industry, primarily as the founder and ex-CEO of Bambora/Worldline.

Berglund, who first joined Trustly in 2010, said: “I have been CEO of Trustly for more than five years now, working with the fantastic Trustly team. Looking ahead, our operations will continue to grow in terms of both size and complexity.

“I have worked with Johan for two years and can for the coming phase of the company’s development think of no better candidate for the Trustly CEO job.

“I look forward to continuing to work closely with him and the rest of the team in my new role, which will allow me to focus on Trustly’s high-impact projects and stakeholder interactions,” he added.

Trustly provides several payments services to operators in the iGaming industry, including instant deposits, instant withdrawals, KYC verification and Pay N Play functionality.

In May, Stockholm-based Trustly was forced to postpone plans for a $9bn IPO after Sweden’s Financial Supervisory Authority raised concerns about the firm’s lack of due diligence on end users.