Key takeaways
- Merchants increasingly ask their PSP for Pay by Bank alongside cards.
- A single Open Banking connection saves PSPs from integrating banks one by one.
- The hard parts are coverage, status handling and the merchant experience.
Payment service providers have built their businesses around cards. But merchants are asking for more: lower-cost options for large baskets, faster settlement and payment methods their customers already use at home. Bank payments answer many of those requests.
Why PSPs are adding Pay by Bank
- Merchant demand. Businesses want a bank payment option without signing another contract.
- Differentiation. A broader payment method mix helps PSPs win and keep merchants.
- New use cases. Bank payments suit high-value purchases, bill payments, top-ups and B2B flows.
- Better economics. Account-to-account payments follow a different cost model than card payments.
Build or partner
In theory, a PSP could connect to every bank's Open Banking interface directly. In practice, that means handling dozens of different API implementations, authentication flows and outage patterns, and keeping up with them as they change.
Most PSPs choose to partner with an Open Banking provider that already maintains those connections and exposes them through one API. The PSP keeps the merchant relationship and the user experience, and the provider takes care of bank connectivity.
The value for a PSP is not the bank connection itself. It's what they can offer merchants once it exists.
What to get right
- Coverage. Make sure the banks your merchants' customers use are supported in each market.
- Status handling. Map bank payment statuses to your existing payment lifecycle so merchants see a consistent picture.
- Onboarding. Fit the new method into your current merchant onboarding and contracts.
- Reporting and reconciliation. Show bank payments next to cards in the same dashboards and settlement reports.
- Checkout experience. Give merchants a hosted or embeddable flow that works well on mobile.
Fitting it into an existing stack
The smoothest integrations treat Pay by Bank as one more payment method in the PSP's existing model rather than a separate product. One API call to create a payment, a redirect for the customer, and webhooks for status updates fit neatly into the patterns PSPs already use.