APP Fraud Rules Force Green Startup Tred To Close
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UK green fintech company Tred is planning to close its business, saying the shutdown is because of new rules about how money is returned in cases of authorised push payment fraud.
The Leeds-based startup, established four years ago, created a carbon tracking debit card and application. This tool helps users see how their spending affects the environment and gives them tips on how to lower their carbon footprint.
Tred’s Closure Comes Four Months After Receiving Investment From Ecotricity
In 2021, Tred got £1 million via a Crowdcube fundraiser, followed by another £600,000 in a crowdfunding round the following year.
The closing down comes just four months after the company got investment from Ecotricity, a green energy company from Stroud. Ecotricity was established by millionaire Labour supporter Dale Vince. Vince stated in September that its time businesses had banking options that doesn’t harm the environment.
He added that top banks are still allocating billions to fossil fuels, an action that should be illegal. Vince further said the firm is investing in Tred to help ensure that money is used to protect the environment, not destroy it. Tred’s way of banking fits perfectly with Ecotricity’s goal to use business for positive change, according to Vince.
The Co-founder of Tred Will Smith, wrote on LinkedIn that endings are tough, but the Tred adventure was amazing and now it’s time to move on. The changes to financial rules about Authorised Push Payment Fraud (APPF) have really affected smaller companies like Tred, and the company was not able to keep going.
He shared how proud he was of the team and what they had built together. In its most recent financial reports, Tred had 16 employees and reported a loss of £1.6 million.
The Rules Aim To Ensure PSPs Are Cautious
The new Authorised Push Payment rules was introduced on October 7 by the Payment Services Regulator (PSR). Under these rules, there is a £100 extra charge on fraud claims, and the most anyone can get back is £85,000.
The regulator noted that these limits will help protect people from losing too much money, but still make sure that payment services providers (PSPs) are careful.
Last year, Tred launched its special green business current accounts, created small and medium-sized businesses in the UK. These accounts were an important step in green finance, offering businesses accounts without any links to fossil fuels. They helped companies move toward a greener future and set a new example for how financial firms can protect the environment.
