Pay by Bank, the digital payment method that allows consumers to pay directly from their bank account without the use of a credit or debit card or typing a PIN, is gaining traction in Europe and the UK suggests recently published research.
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The annual Pay by Bank Signals & Trends survey published by Token.io and Open Banking Expo found that 72% of banks and 87% of payment service providers already offer and accept Pay by Bank.
The report also looked at what was needed to increase adoption further. More than half of respondents (59%) stated that recurring payment and 1-click capability are essential if Pay to Bank is to become a genuine alternative to card payments.
Subscriptions and bill payments were seen as the best opportunity to displace card payments, according to 62%, followed by e-commerce (59%).
Point-of-sale capabilities were cited as one of the most important features needed for Pay to Bank to be a genuine alternative to card payments.
Bringing Pay to Bank to the till would close one of the most important gaps with card payments and would help Pay to Bank to gain traction beyond the online world and into the physical retail environment, states the report.
“The value proposition for Pay by Bank has long been understood across the payments ecosystem, and our survey shows that merchants are increasingly recognising its potential across a broad range of use cases," said Todd Clyde, CEO at Token.io.
“The opportunity now is to make Pay by Bank easier for merchants to offer and consumers to use. Recurring and 1-click payments, wider acceptance, and strong PSP partnerships will be key to helping Pay by Bank compete with established payment methods.”
The survey also shows growing competition in the Pay for Bank space for PSPs. Almost half (45%) of PSP respondents identified open banking providers as a threat gievn that more than a third of PSP respondents stated they had experienced merchants bypassing their platforms to work directly with open banking providers offering Pay by Bank services.