Lydia’s imaginative and prescient has developed to develop into a monetary tremendous app that permits you to management your financial institution accounts and entry varied monetary providers. In France, you may join your Lydia account together with your checking account utilizing Price range Perception’s Budgea API.
Over the approaching weeks, Lydia goes to change over and use Tink for many shoppers going ahead. If in case you have a checking account in a small French financial institution, Lydia may nonetheless use Price range Perception for these accounts.
“It’s going to be a progressive rollout and we’ll use the very best service relying on our customers,” Lydia co-founder and CEO Cyril Chiche informed me.
Open banking is a broad idea and covers many various issues. In Lydia’s case, we’re speaking about two options particularly — account aggregation and fee initiation.
Within the app, you may join your financial institution accounts and think about the latest transactions. This function is essential if you wish to develop into the go-to monetary app in your customers’ residence display.
As for fee initiation, because the identify suggests, it helps you to begin a SEPA financial institution switch from a third-party service. As an example, you may switch cash out of your checking account to your Lydia pockets immediately within the Lydia app. You may also transfer cash between a number of financial institution accounts from Lydia.
Tink supplies a single API that manages all of the complexities of the data techniques of European banks. An API is a programming interface that lets two totally different providers discuss and work together with one another. Tink does the heavy lifting and interprets every banking API right into a predictable API that you should use for all banks.
Since 2018, banks have to supply some form of API as a result of Europe’s DSP2 regulation. It’s been a sluggish begin as many French banks nonetheless don’t present a usable API. But it surely’s slowly evolving.
Tink’s API helps 15 financial institutions in France, together with main banks, N26, Revolut and American Categorical. And it covers a dozen European markets, which goes to be essential if Lydia desires to seize extra customers outdoors of its residence nation.
“At first, it’s not going so as to add new issues to the app. However it would enable us to supply options in a really secure atmosphere and at a European scale,” Chiche mentioned.
“We wish to have essentially the most uniform product throughout totally different markets,” he added later within the dialog.
Pay together with your card or together with your checking account
Whenever you first set up Lydia and wish to pay again a pal, you affiliate your debit card together with your Lydia account. The startup fees your card earlier than sending cash to your pal.
If open banking APIs develop into the norm, you possibly can think about grabbing cash from somebody’s checking account immediately as a substitute of paying card processing charges. However this type of options is nowhere close to prepared for prime time.
“What made us select card funds is that it’s a secure system with widespread utilization — and it really works each time. Whenever you’re coping with funds, it has to work each single time,” Chiche mentioned.
Lydia isn’t altering something on this entrance for now. However you possibly can think about some modifications in a number of years. “We’re the start of a brand new system that isn’t going to be prepared inside the subsequent 18 months,” Chiche mentioned.
Playing cards additionally present many benefits, comparable to the flexibility to chargeback a card. And card schemes have been making an attempt new issues, comparable to the flexibility to switch cash immediately from a card to a different card. So that you’re not going to ditch your Mastercard or Visa card anytime quickly. However Chiche thinks there will probably be some competitors in Europe between DSP2-ready banks and card schemes. European shoppers ought to see the advantages of elevated competitors.
In different information, Lydia utilization dropped fairly drastically throughout the full lockdown earlier this yr. However transaction quantity has bounced again since then and reached all-time highs. The corporate processes €250 million in transactions each month and it’s presently including 5,000 new customers on daily basis.
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