Key takeaways
- Pay by Bank lets customers pay from their bank account through their own banking app.
- There are no card numbers to type in and no bank details to copy.
- Merchants get a confirmed payment status as soon as the customer approves.
Pay by Bank is a payment method that lets customers pay directly from their bank account. Instead of entering card details, they choose their bank, approve the payment in their banking app, and come straight back to the merchant.
It runs on Open Banking payment initiation, but the customer doesn't need to know that. To them it feels like a short trip to an app they already use every day.
The checkout journey, step by step
- Choose Pay by Bank. The customer selects it next to the other payment methods at checkout.
- Pick a bank. A searchable list shows the banks available in the customer's country.
- Approve. The customer is sent to their banking app (on mobile) or online banking (on desktop, often through a QR code). The amount, the merchant and the reference are already filled in.
- Return. Once approved, the customer is sent back to the merchant's confirmation page.
On mobile, the whole journey usually takes a few taps. Biometric approval in the banking app replaces passwords and one-time codes.
What happens behind the scenes
When the customer approves, the bank initiates a credit transfer from their account to the merchant's account. The payment provider receives the status from the bank and passes it to the merchant, usually through a webhook, so the order can be confirmed straight away.
Because the transfer is pushed by the customer's own bank, the payment details are always correct. There are no typos in IBANs and no missing references to chase.
No card numbers, no copied IBANs. The bank fills in the details and the customer simply approves.
Why customers like it
- It is familiar: they approve inside the banking app they already trust.
- It is quick: no forms to fill in and no card to find.
- It is secure: bank credentials are never shared with the merchant.
Why merchants offer it
- Fast confirmation of payment status.
- Fewer failed payments caused by wrong or expired card details.
- A cost structure that differs from card acceptance, which can matter for high-value or high-volume payments.
- Clear references that make reconciliation simpler.