The rise of digital payments has changed the nature of how people do business with each other; and open banking — a movement in banking where incumbents are finally adopting newer technology such as APIs to open their systems to modern integrations — is leading to a wave of new payment methods, all of which are hoping to become as standard as cash or paying with cards. In the latest development on this theme, a U.K. startup called Token.io has closed $40 million in funding to expand its own push in payments tech — account to account payments and accessing accounts for transactions by way of a single API — deeper into the U.K. and across Europe.
Token kept the name and some of the legacy of how “token” has traditionally been used in financial services to continue its focus on secure and modern open banking technology and has been a part of the group of companies riding the wave of interest in building new services to compete with existing payment rails with the promise of giving consumers and businesses more choices and lower costs in the process. Account-to-account payments is not exactly a new concept in its most general sense, but it’s long been a complicated and expensive process, not something that you would use for everyday payments but something that required set up with banks, sometimes paperwork to fill out and fees to pay. What has changed in the last several years — spurred also by innovations from companies like GoCardless — is the idea of it becoming something that is quick and easy to do, as easy as pulling out a card or cash from your wallet. In the U.K., where open banking has been getting rolled out for years with the country’s major banks, this is relatively straightforward since those banks are using the same standards; in Europe, Clyde said, this has been a significantly more complex undertaking, with Token taking 14 different banking standards and “harmonizing” them and building them into its API, effectively making it possible to access payments for account holders across thousands of banks in 16 countries through its single API.