Trustly vs PayPal

Why Use Trustly Instead of PayPal?

PayPal is the dominant US-headquartered payments platform globally, with massive brand recognition and integration ecosystem. For European merchants accepting payments from European customers, the trade-offs are familiar: PayPal is US-jurisdiction, transaction fees are higher than open-banking alternatives, and the card-network rails underlying PayPal involve multiple intermediaries each taking a fee.

Trustly is the Swedish alternative. Stockholm-headquartered, PSD2-native open-banking payments enabling direct bank-to-bank transfers, used by major European merchants (gaming, e-commerce, travel, fintech) for materially lower fees and faster settlement than card-network alternatives.

Feature Comparison

Feature	Trustly	PayPal
Jurisdiction	Sweden 🇸🇪	United States 🇺🇸
Data location	EU	US default
GDPR	✅ Native	⚠️ Provider claims
CLOUD Act exposure	❌ None	⚠️ Yes
Payment rails	Direct bank-to-bank (PSD2)	Card networks + bank transfer
Transaction fees	Lower (0.5-2% typical)	Higher (typically 2.9% + fixed)
Settlement time	T+0 to T+1	T+1 to T+3
EU bank coverage	✅ Comprehensive	Via card networks
US bank coverage	Limited	✅ Comprehensive
Cards required	❌ No	✅ Yes
Strong customer authentication	✅ Bank-native	Via 3DS
E-commerce plugins	✅ Major platforms	✅ Best-in-class breadth

For European merchants prioritising lower fees and EU jurisdiction, Trustly is structurally aligned. For US-market or brand-recognition-driven checkout, PayPal still wins.

Pricing

Trustly custom pricing:

• Per-transaction fee structure: typically materially below card-network alternatives
• No setup fees for standard integration
• Volume-based pricing: better rates at higher transaction volume
• Pricing factors: country coverage, transaction volume, payment-method mix

PayPal for comparison:

• Standard rates: 2.9% + €0.35 per transaction (EU)
• Volume discounts: available for high-volume merchants
• PayPal Commercial Entity: applies for high-volume operations

For mid-to-high-volume European merchants, Trustly typically delivers materially lower effective payment costs than PayPal’s standard rates.

Privacy & Data Sovereignty

Trustly’s structural advantages:

• Swedish corporate jurisdiction — Trustly Group AB subject to Swedish and EU law
• PSD2-regulated payment institution under EU financial services framework
• EU data centres for transaction data
• GDPR-native with comprehensive Article 28 DPA
• No US legal exposure for European customer payment data
• Swedish FSA as primary financial regulator
• DORA-aligned for financial-services operational resilience

For European e-commerce handling customer payment data, EU jurisdiction at the payment processor level is materially relevant — particularly under PSD2 strong customer authentication and broader EU financial-services regulation.

Migration Guide

Adding Trustly as primary or additional payment method:

1. Trustly merchant account setup and contracting (2-4 weeks)
2. Choose integration approach — REST API, hosted checkout, or e-commerce plugin (1 week)
3. Implement checkout integration with appropriate testing (2-3 weeks)
4. Configure settlement — bank account for merchant payouts (1 week)
5. Pilot with subset of transactions (1-2 weeks)
6. Full rollout running parallel to existing payment methods (operational)
7. Track payment-method mix and adjust positioning as Trustly delivers cost savings (ongoing)

Estimated total time: 6-12 weeks for substantial e-commerce integrations. Difficulty: Moderate; payment integrations need careful testing and dispute-resolution preparation.

Real-World Use Cases

A Stockholm-based e-commerce platform uses Trustly as primary payment method for Swedish, Norwegian, Finnish, and Danish customers. The combination of native Nordic bank coverage, lower fees than card networks, and faster settlement materially improved margin economics versus PayPal-dominated checkout.

A German online gaming operator uses Trustly extensively for player deposits and withdrawals. The direct bank-to-bank flow eliminates card-network fraud disputes; the faster settlement improves cashflow management.

A pan-European fintech uses Trustly for account funding flows. The PSD2-native open-banking integration plus EU jurisdiction matched their broader regulated-financial-services positioning.

Company Background

Trustly Group AB was founded in 2008 in Stockholm, Sweden. The company pioneered open-banking payments before PSD2 created the structural framework supporting the model. By 2026, Trustly is one of the major European open-banking payment processors, with strongest position in Nordics and growing across EU markets.

In 2023-2024, Trustly acquired Ecospend (UK open-banking provider), expanding UK and broader European market coverage. The company is publicly listed on Nasdaq Stockholm, providing public-company governance transparency.

Trustly is a strategic European fintech asset — one of the leading non-US payment processors, with structural advantages from EU jurisdiction and PSD2 regulatory framework alignment.

Security & Compliance

• PSD2-regulated payment institution (Swedish FSA licensed)
• Strong customer authentication (SCA) native via bank-side authentication
• ISO 27001 certified
• PCI DSS compliant
• GDPR-native with comprehensive Article 28 DPA
• EU data centres for all transaction data
• TLS 1.3 for all transactions
• DORA-aligned for operational resilience
• NIS2-aligned for digital infrastructure

Integration Ecosystem

• E-commerce platforms: Shopify, Magento, BigCommerce, WooCommerce, Salesforce Commerce, custom commerce
• PSPs: Adyen, Stripe (via complement), Klarna integration
• Risk and fraud: integration with major fraud prevention platforms
• Bank connectivity: comprehensive EEA bank coverage
• API: comprehensive REST API for direct integration
• Hosted checkout: ready-to-use checkout flows
• Webhooks: payment-event notifications

Who Should Use Trustly?

Trustly is ideal for:

• European e-commerce wanting lower payment-processing fees
• Gaming and gambling operators needing fast, secure payment rails
• High-value transactions where card-network fees materially impact margins
• EU-jurisdiction-conscious merchants wanting non-US payment infrastructure
• Nordic, German, Dutch, Spanish merchants with strong local bank coverage

The Bottom Line

PayPal remains the right choice for merchants prioritising brand recognition, comprehensive global coverage, and the specific PayPal buyer-protection ecosystem. For European merchants prioritising lower fees, faster settlement, EU sovereignty, and PSD2-native open-banking payment rails, Trustly is the better choice: Swedish corporate base, public-company governance, comprehensive European bank coverage, and materially better economics for mid-to-high-volume operations.

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Looking for more European fintech alternatives? See also: Mollie vs Stripe and Pleo vs Brex.

Frequently Asked Questions

How does open-banking payment work?

Open-banking payments use PSD2's Account Information Services and Payment Initiation Services to enable direct bank-to-bank transfers. Customer authorises payment from their bank account via Trustly's interface (typically with their bank's strong customer authentication — BankID, IDIN, etc.). Funds move from customer bank to merchant bank within seconds. No card network involved, lower fees, faster settlement, reduced fraud.

Why is Trustly cheaper than PayPal or cards?

Open-banking payments bypass the card network (Visa, Mastercard) and the interchange fees that flow to issuing banks. PayPal layers additional fees on top of card-network or bank-transfer rails. Trustly's direct bank-to-bank infrastructure eliminates these layers — for mid-to-high-value transactions especially, the merchant savings are meaningful (often 0.5-2% of transaction value).

Is data hosted in the EU?

Yes. Trustly hosts customer transaction data and payment infrastructure in EU data centres. Trustly Group AB is a Swedish company subject to Swedish and EU law. As a regulated payment institution under PSD2, Trustly operates under EU financial-services frameworks.

Which countries does Trustly cover?

Trustly covers all EEA countries with native bank connectivity. Strongest position in Nordics (Sweden, Norway, Denmark, Finland), Netherlands (iDEAL adjacency), Germany, Austria, Spain, and the UK (via Ecospend acquisition). Coverage continues expanding across European banks.

Can I integrate Trustly into my e-commerce checkout?

Yes. Trustly provides integration via REST API, hosted checkout, and major e-commerce platform plugins (Shopify, Magento, WooCommerce, BigCommerce, custom commerce). Implementation timelines vary by platform — typically 2-4 weeks for substantial e-commerce integrations including testing.