Tink’s Ian Morrin explores how Pay by Bank is a fast, secure, and low-cost Open Banking solution and why it is gaining traction.
Pay by Bank is undoubtedly gaining more and more traction in the world of payments. Here, Tink’s Ian Morrin discusses what is driving the adoption of this Open Banking solution that provides a fast, low-cost, and more secure method for account-to-account payments (A2A).
The quest for reliable, secure, and user-friendly payment methods is relentless. If you’re an ecommerce business or payment service provider (PSP), you’re likely familiar with this pursuit. As a merchant, you might be experiencing payment method fatigue trying to stay on top of the variety of payment methods on offer and may find it hard to determine which payment methods are worth the integration.
Pay by Bank is the now commonly used term for the account-to-account payment method that allows consumers to quickly transfer money directly from one bank account to another – whether that be to a business, another consumer, or between their own personal accounts. Pay by Bank combines a modern, seamless user experience with industry-leading security and low costs.
Once a consumer authenticates using Face ID, a fingerprint or a similar secure bank-level verification method, the money moves between accounts instantly. With less data entry and fewer redirects, Pay by Bank provides a streamlined experience – at low cost – by letting consumers authenticate and initiate payments with a couple of clicks.
Many checkouts that consumers use these days are enabled by payment service providers (PSPs), two of the more well-known ones being Adyen and Stripe. These PSPs mostly go unnoticed by the consumer checking out, but for the businesses using them, they can provide vital infrastructure to allow their customers to check out smoothly.
At their core, PSPs aim to enable merchants to process payments from the widest possible customer base, ensure transaction security, and simplify payment processing. But to thrive in the competitive payments industry, PSPs must also achieve more fundamental goals such as growing revenue and increasing profitability. While many payment methods can help PSPs meet the first goal, not all can deliver on the second. That’s where Pay by Bank shines. It not only broadens their total base of end-users, but can also help them and their merchants with a cost-effective payment method that can reduce fraud and losses.
At Tink, we want account-to-account payments to become more prominent in digital commerce especially – for one, it gives consumers more choice at the checkout, helping financial inclusion. However, ecommerce is arguably the hardest segment in payments to serve because it’s where both merchants and consumers are the most demanding in terms of the experience they want to have.
The interest from merchants and retailers is there though. At Tink, we’ve talked to so many and there is a healthy pipeline of companies that are adopting Open Banking payments. Consumer adoption is a big focus now, as the next logical question we often hear is ‘will people use this?’
And it’s great to be able to show that millions are already using Pay by Bank – for things like bill payments and account top-ups – and the user experience is seamlessly transferable from one use case to another. For example, Tink is helping to enable Pay by Bank payments with a wide variety of partners, including TransferGo for international money transfers, Eventim for ticketing services, and Splitwise for bill splitting and expenses.
With Splitwise in the UK, Pay by Bank is the primary payment method for settling bills between friends and family. Since launching in-app payments, they have seen a 90%+ completion rate and in the first three months post-launch, customers made payments totalling over EUR 2 million using Pay by Bank. Gaining traction in the highly competitive ecommerce landscape isn’t without its challenges – consumers and retailers must find it user-friendly, trustworthy, and understand the benefits. And as many providers of Pay by Bank don’t have a direct line of communication with consumers, the collaboration between companies like Tink and PSPs and merchants is critical to help overcome these challenges.
In conclusion, Pay by Bank is rapidly gaining traction in the payments industry due to its fast, secure, and cost-effective nature. As more merchants and consumers recognize the benefits of this innovative payment method, its adoption continues to grow.
If you are a merchant or a PSP looking to enhance your payment offerings, now is the time to consider integrating Pay by Bank. Join the growing number of businesses benefiting from this seamless and secure payment method.
This editorial piece was first published in The Paypers' Open Finance Report 2024, the latest comprehensive market overview and analysis focusing on the key players and products within the Open Banking and Open Finance ecosystem. Download the full report to discover more insightful content.
Ian Morrin is Head of Payments & Platforms at Tink, A Visa Solution. Ian has a dual role of leading Tink’s UK operations and being responsible for Tink’s payments & platforms business across 19 markets. Ian was previously Tink’s VP of Payment Sales, where he led the charge to take Pay by Bank to mass adoption. Ian has also held board and leadership roles at a range of companies including Bud and Expedite Growth.
About Tink
Tink, A Visa Solution, is a market-leading Open Banking platform serving some of the world’s largest financial institutions. Tink provides solutions that power the new world of finance – such as initiating account-to-account payments and onboarding new users. A wholly owned subsidiary of Visa, Tink was founded in Stockholm in 2012. Today, Tink and Visa’s Open Banking solutions are present in 20 markets, with 13,000 connections to financial institutions.
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