The article discusses the rise of pay-by-bank payments, which allow users to make direct account-to-account transactions bypassing traditional card networks. This method, driven by open banking, offers advantages such as enhanced speed, security, and user consent control, leading to lower costs. The article highlights the explosive growth of pay-by-bank in the UK from 320,000 transactions in 2018 to an expected 224 million in 2024, with a global market forecast of $164.8 billion by 2032. The shift towards these payments is accelerated by digital natives, particularly Gen Z, who prefer seamless, digital-first solutions over traditional banking methods.
Rising card fees and chargebacks create unnecessary costs, while customers now expect instant, seamless payment experience. Pay-by-bank is the smarter alternative, and it's growing impossible for businesses to ignore.
Pay-by-bank is an account-to-account payment method powered by open banking. Banks securely share APIs with licensed providers, and users authorise payments directly through their bank's interface.
With the global market set to hit $164.8 billion by 2032, 2025 is the tipping point. Digital natives, particularly Gen Z, are redefining payment expectations.
Take the success of challenger banks like Revolut in the UK. They exploded in popularity by offering fast, frictionless banking, unlike clunky legacy banks.
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