A new survey report from Token.io and Open Banking Expo has revealed that Pay by Bank has become part of banks and PSPs’ offering due to scaling merchant demand.
The report surveyed 96 banks, payment service providers (PSPs), third-party providers (TPPs), merchants, and industry observers, analysing industry demand for, as well as adoption of, Open Banking-enabled Account-to-Account (A2A) payments, commonly known as Pay by Bank. The increase is driven by merchant demand, scaling market confidence, and growth expectations, with 59% of banks and 90% of PSPs currently providing, or planning to deliver, Pay by Bank services as part of their offering.
The report’s findings
Facilitated by minimised processing fees, more efficient settlement, and augmented conversion rates, the research underlines substantial merchant demand for Pay by Bank, with 91% observing demand and 39% defining it as high. Additionally, PSPs are starting to react, with 95% of them seeing Pay by Bank as a significant part of their near-term product strategy, while 40% of them describe it as very important.
Furthermore, falling in line with merchant demand and respondents’ expectations of at least moderate Pay by Bank growth in the UK (78%) and Europe (88%) over the next year, financial institutions are also recognising and beginning to react to the payment method’s commercial potential. 42% of the surveyed banks offer Pay by Bank services to corporate clients, while a majority either accept or plan to accept deposits and payments from retail customers through Pay by Bank.
At the same time, the survey found that payment industry attention is moving toward commercial Variable Recurring Payments (CVRP), a new Pay by Bank capability that will allow additional use cases, including subscription payments and 1-click ecommerce. The majority of PSPs and almost all TPPs surveyed as part of the report underline that merchants are requesting CVRP features, with 62% of PSPs intending to support this option by the end of 2026.
In addition to this, the report emphasises a possible supplementary motivator for Pay by Bank demand, namely, decreasing reliance on international card schemes and digital payment options. 75% of respondents said that onshoring payment services to the UK or Europe is at least somewhat important to their company, while 29% reported that it is highly important.
