The emergence of “pay by bank” technology is poised to reshape the payment landscape by enabling direct bank account payments, bypassing traditional intermediaries like credit card networks. Trustly’s Chief Revenue Officer, Frederick Crosby, highlighted that this innovation, grounded in the open banking framework, simplifies transactions for both consumers and merchants by reducing costs and eliminating friction.
Pay by bank allows consumers to authorize third-party providers to access their bank information securely, facilitating direct payments to merchants. This method not only streamlines the payment process but also lowers transaction fees for merchants, particularly in sectors with recurring payments, such as utilities and subscriptions.
As this payment method gains traction, its adoption in the U.S. will depend on consumer trust in data security and regulatory support from bodies like the Consumer Financial Protection Bureau (CFPB). The potential for cost savings and increased payment reliability positions pay by bank as a compelling alternative to traditional credit card payments, especially in markets where merchants operate on thin margins.
As open banking continues to evolve in the U.S., pay by bank could play a significant role in transforming how payments are made, offering a more efficient and cost-effective solution for consumers and businesses alike.
