Monzo partners with TrueLayer to combat open banking loophole
Challenger bank looks to bring open banking payments in line with card blocks for gambling spend
UK online bank Monzo has partnered with TrueLayer to enhance its gambling protections services for customers.
The new measures will allow Monzo to benefit from an extended gambling block to prevent open banking-powered payments to operators.
Since 2018, Monzo customers have been able to request a block on gambling transactions which are non-reversible for 48 hours.
However, these blocks only work on card payments using merchant category codes which allow banks to deduce what type of business their customer is attempting to pay.
Open banking payments are not supported by merchant category codes, leaving a potential loophole for those at risk from gambling-related harm.
Under the remit of the new partnership, TrueLayer will be able to automatically notify Monzo any time a customer attempts to make an open banking payment to a gambling company.
The development and integration of the TrueLayer monitoring software only took a few days, according to the bank.
Elsewhere, Monzo CEO TS Anil has penned an open letter to the UK government imploring it to introduce new rules requiring all banks and building societies to offer gambling spending blocks as part of the Gambling Act 2005 review.