Pay by Bank

Pay by Bank presents as a checkout option alongside cards and digital wallets. When a consumer selects it, the checkout flow redirects them, or deep-links into their mobile banking app, where they authenticate with their bank directly and approve the specific payment. The merchant never sees the consumer's bank credentials.

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Behind the scenes, the merchant's payment provider (acting as a licensed Payment Initiation Service Provider, or PISP) uses the payer's bank's open banking API to submit a payment instruction. The bank executes the instruction over its domestic rail, Faster Payments in the UK, SEPA Instant across much of the EU, FedNow, RTP, or ACH in the US, and funds reach the merchant's account within seconds.

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The payment is a push payment: the payer instructs their bank to send money. This is the inverse of card payments, where the merchant (via their processor) pulls funds from the payer's account. The push model means merchants receive irrevocable, real-time settlement and bear no chargebacks from card scheme disputes, though bank dispute and refund processes still apply.

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On mobile, Pay by Bank typically integrates with the bank's app via deep link, making the authentication step seamless: the consumer approves the payment with Face ID or a fingerprint in their banking app and is returned to the merchant's confirmation screen in seconds.

Pay by Bank is the lowest-cost payment method available to most online merchants in markets with strong open banking infrastructure. Removing interchange, scheme fees, and acquiring margin can reduce the effective cost of acceptance by 60%–80% versus card-not-present transactions, with direct impact on margin.

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Conversion can be competitive with cards for the right merchant category and demographic. In markets where consumers are accustomed to bank-authenticated payments, Scandinavia, the Netherlands, Germany, Pay by Bank conversion rates are high. In markets with strong card rewards cultures, the US, UK for high-spend consumers, conversion remains lower because consumers weigh the loss of rewards and purchase protection against the frictionless authentication experience.

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For merchants with large average order values, the absence of card fraud chargebacks is a significant operational benefit. Chargebacks on card transactions generate both financial losses and operational overhead; Push payments are authenticated at the bank level and cannot be disputed on the same basis as unauthorized card use.