Comparing the Top Open Banking Platforms of 2024: TrueLayer vs Plaid

Note that the information about TrueLayer and Plaid found in this article was taken from their respective websites on 2 October 2024. This information is subject to change.

In recent years open banking has transformed the financial sector, enabling trouble-free data sharing and innovative services. Two leading players in this area, TrueLayer and Plaid, offer sophisticated platforms for businesses looking to tap into these capabilities. Our blog entry today compares the two platforms, helping you determine which might better suit your needs.

Key Features and Capabilities

Founded in 2016, TrueLayer is an account-to-account payment infrastructure provider offering robust APIs allowing businesses to connect with their customers' bank accounts securely.

Its products, including Data API, Payments API, and Auth API, are famous for helping to bring about a new era of frictionless, cost-effective payments, tackling fraud and enriching the user experience. According to a report by Finextra, TrueLayer has been experiencing growth across Europe, with 2023 marking its strongest year yet, despite financial losses, reaching £21 billion in processed payment volumes.

The Auth API makes it easy for businesses to verify customer identities and comply with regulations. The Data API allows businesses to access real-time financial data from user bank accounts, providing insights into transactions, balances, and account details.

Crucially, the Payments API enables near instantaneous (under five seconds) bank-to-bank payments, which can significantly reduce transaction costs compared to traditional payment methods.

The standout difference with Truelayer is that it manages instant payments using the UK's Faster Payments system and SEPA for Europe. It doesn't directly handle Automated Clearing House (ACH) transfers since this process is unique to the US banking system.

Founded in 2013, Plaid operates mostly in the USA and Canada, so ACH transfers are a central feature of its platform. Plaid also offers a wide range of API products such as Transactions, Auth, and Liabilities. These are popular with developers because they have made the task of fintech app integration so simple.

A survey by Plaid found that 88% of Americans now use fintech apps to manage their finances, highlighting the growing importance of such integrations.

Plaid's Transactions API provides detailed financial data, including merchant names, categories, and location information. Their Auth API allows for quick account verification, while the Identity API helps businesses confirm user information. Plaid also offers specialized APIs like Investments and Liabilities, providing data on investment accounts and outstanding loans.

Regional Coverage and Market Presence

TrueLayer has a strong presence in the UK and EU, making it an excellent choice for businesses operating primarily in these regions. The company claims to cover 99% of UK 
consumer bank accounts. This extensive reach enables businesses using TrueLayer to connect with a wide customer base.

In addition to the UK, TrueLayer has been expanding its services across the European Economic Area (EEA). It now supports major banks in countries like Germany, France, Spain, and Italy and others. This huge effort has positioned TrueLayer as a key player in the European open banking ecosystem.

By contrast, Plaid's coverage in the US is particularly extensive, connecting to almost every bank and credit union, having near monopoly on open banking payments. Plaid claims to cover over 12,000 financial institutions globally. It has also made significant inroads in Canada and the UK. The company is also building out its European presence, including 15 European nations, with Austria and Finland “coming soon” into the coverage.

By contrast, Plaid's coverage in the US is particularly extensive, connecting to almost every bank and credit union—over 12,000 financial institutions in total, and 88% of US bank accounts. It has also made significant inroads in Canada and the UK. The company is at last building out its European presence, starting with France, Ireland, and the Netherlands.

At this point, it’s worth noting that other services, like Noda, offer excellent coverage in the UK and EU markets, as well as the likes of Brazil and Canada. In fact, Noda connects with over 16,500 banks in 27 countries. With Noda your customers get to enjoy faultless payments without having to leave the reassuring familiarity of their trusted bank brand.

Industries Served and Use Cases

Both TrueLayer and Plaid cater to a variety of industries, but their strengths differ slightly:

• TrueLayer is particularly strong in e-commerce and direct-to-consumer payments. It works both as a provider of open banking technology and directly with e-commerce platforms. Its payment solutions are particularly popular among online retailers looking to reduce transaction fees and simplify checkout processes.
• TrueLayer has also gained favor in the wealth management sector, providing APIs that allow investment apps to access real-time banking data. This enables these apps to offer more comprehensive financial planning services to its users.
• Plaid shines in the broader fintech ecosystem, serving wealth management apps, personal finance tools, and lending platforms. Its technology drives up to 8000 of the popular apps used by consumers on a daily basis to manage their finances. For example, many budgeting apps use Plaid to aggregate user financial data from multiple accounts.
• Plaid has also made significant inroads in the lending industry. Its Income API, which verifies a user's income and employment, has become a valuable tool for lenders looking to beef up their underwriting processes.

Security, Compliance, and Developer Experience

Both platforms prioritize security and compliance, adhering to the EU’s revised Payment Services Directive (PSD2) regulations and maintaining robust data protection measures. TrueLayer is regulated by the UK's Financial Conduct Authority, while Plaid complies with various international standards.

TrueLayer employs bank-grade encryption and is ISO 27001 certified, providing high standards of information security management. It also provides detailed security documentation and regularly undergoes third-party security audits.

Plaid uses end-to-end encryption and tokenization to protect sensitive data. It’s SOC 2 Type II compliant and adheres to the GDPR in Europe. Plaid also offers features like multi-factor authentication to enhance security.

For developers, both offer comprehensive documentation and sandbox environments. Plaid's investment in listening to developer feedback has been a key part of its strategy, helping them refine their documentation and tools.

For developers, both offer comprehensive documentation and sandbox environments. Plaid's recent Developer Experience Survey found that 92% of developers rated their experience with the platform as positive. This high satisfaction rate is attributed to Plaid's clear documentation, robust SDKs, and responsive support team.

TrueLayer has made sure of a pleasant, helpful developer experience, with detailed API references, code samples, and SDKs for various programming languages. The platform offers a self-serve developer portal that allows for quick integration and testing.

Pricing Models and Support

Pricing is often an important factor when selecting the most suitable platform.

TrueLayer offers a tiered pricing model based on transaction volume and API calls. It provides custom enterprise plans for larger businesses. While it doesn’t publicly disclose its exact pricing, reports suggest that its fees are competitive, especially for high-volume users.

TrueLayer's pricing structure is designed to scale with your business, making it an attractive option for startups and established companies alike. It also offers volume discounts for businesses that process a large number of transactions.

Plaid's pricing is also volume-based, with different tiers for various products. It offers a "pay-as-you-go" model for smaller businesses and startups. This flexible approach allows businesses to start small and scale their usage as they grow.

For its core products, Plaid charges per API call, with rates varying depending on the specific API and volume of calls. It also offers custom pricing for enterprise clients with specific needs or high volumes.

Both companies provide customer and technical support, with dedicated account managers for enterprise clients. TrueLayer offers email support for all clients, with phone support available for higher-tier customers. It also provides extensive documentation and a knowledge base to help users troubleshoot common issues.

Plaid offers similar support options, including email support for all users and dedicated support for enterprise clients. In addition, it maintains an active community forum where developers can share knowledge and get help from peers.

The Decision

While both platforms offer impressive open banking capabilities, TrueLayer might be preferable for UK and EU-focused businesses, especially those in e-commerce. Plaid could be the better choice for companies looking for broad fintech integrations, particularly in North America.

Online reviewers have generally found TrueLayer easier to use and to conduct business with overall, while Plaid is said to have a slight edge in terms of transaction processing speed. Still, TrueLayer is not too far behind with regards to speed, due to its intelligent caching mechanisms, which reduce the need for repeat requests.

Remember, there are other players in the market too. If you're looking for e-commerce payment solutions, particularly in the UK and EU markets, platforms like Noda offer specialized services that were designed with online retailers in mind, such as optimized checkout processes and advanced fraud prevention tools.

Noda’s open banking platform can help businesses to improve conversion rates, reduce cart abandonment, and eliminate the chargebacks and middleman fees that come with traditional payment methods like cards. Noda covers the entire CB2BC payment cycle, offering both pay-ins and payouts, enabling instant refunds and enhancing customer satisfaction. This way merchants can use their pay-in balance for payouts, cutting out any unnecessary bank transfers.

Noda brings an array of advanced features carefully tailored to the needs of specific industries. These include data services, LTV prediction, and identity verification, which are often crucial for such sectors as travel sector, lending or insurance.

In conclusion, there are many more options today. To identify the right platform, consider factors such as geographic coverage, your API needs, pricing structures, integration complexity, and regulatory compliance issues in your target markets. Only by carefully evaluating these factors can you make an informed decision that fully supports your business objectives.