Pay By Bank – A New King Arises

By Delia Pedersoli, COO, MultiPay Global Solutions

Payments have never been and will never be static. As technology, security, and consumer demands evolve so do payment methods. While card payments may rule the roost today, their days are already numbered.

What will supplement card payments is still up for debate, however some strong contenders are arising. Built to deliver business benefits to retailers and an enhanced customer experience (CX), Pay By Bank is one contender with eyes on the throne.

The new king in town

For those who haven’t heard of Pay By Bank before, it is an alternative payment method (APM) that requires no additional downloads for a customer. Instead, when in-store and at checkout, a customer selects Pay By Bank as a payment option. They then scan a uniquely generated QR code on the checkout terminal, opening the customer’s banking app. From there, with one click, customers can authorise the payment. A bank-to-bank transfer then sends funds instantly to the retailer’s account.

Data from the British Retail Consortium (BRC) found that APMs already account for 5% of all transactions in the UK. At the same time, research from EY discovered that 85% of US merchants expect to accept new APMs in the next three years. As demand for APMs rises across the world, Pay By Bank is well on course to be at the forefront of the queue to replace card payments.

Turning zero into a hero

However, it is not just rising demand for APMs that makes Pay By Bank a challenger to credit card payments. The evolution of consumers is equally important. In recent years we have witnessed the rise of “zero consumers” who have no brand loyalty and no patience for bad service. This lack of patience for bad service makes Pay By Bank a powerful tool in retailers’ arsenals. Offering a quick and easy checkout process that bypasses the need to enter card details or navigate cumbersome checkout procedures provides a hassle-free way for consumers to pay, significantly boosting the overall customer experience.

Offering a new and easy way to pay is not the only way Pay By Bank boosts CX. Connecting seamlessly with existing loyalty programmes means data and insights generated by Pay By Bank payment systems can easily be used and combined with online payment data for a full 360-degree view of the customer. With a more detailed view of each customer merchants can provide tailored offerings and promotions that enhance customer relationships and prevent customers from becoming zero consumers.

Operational savings without a CAPEX cost

While Pay By Bank’s enhancements to CX are very impressive, possibly the biggest benefit it offers is operational improvements. Firstly, Pay By Bank provides significant cost savings to merchants by eliminating interchange and scheme fees. These savings can then be used to drive growth, improve operations, enhance CX, or simply added to the bottom line.

Secondly, Pay By Bank also sees funds instantly transferred from the customer to the merchant’s account. Having funds arrive instantly provides accurate and real-time visibility into revenue and quick access to reserves. Furthermore, as funds flow seamlessly between accounts, there is a minimised exposure to fraud, further reducing operational losses.

Accessing the advantages Pay By Bank offers doesn’t have to break the bank, either. It is a versatile solution that meets retailers’ immediate requirements and lays the groundwork for future advancements. Working with the right technical partner, retailers can seamlessly integrate Pay By Bank into existing hardware and software payment systems. This eliminates the need for substantial capital investment, improving Pay By Bank’s ROI.

Too good to be true?

Is Pay By Bank too good to be true? Well, Pay By Bank is already in use with millions of consumers each day. Over in Sweden, for instance, the Swish payment platform, an early version of a Pay By Bank type system, has 8 million users, with the average user making over 10 transactions in May 2023 alone. With the arrival of newer systems, retailers worldwide can now quickly and easily deploy their own Pay By Bank solution and begin taking advantage of its benefits.

Ultimately, payments are constantly evolving. Retailers must be ready to adapt and offer the latest payment method to maintain a positive relationship with the new breed of “zero consumers”. The good news with Pay By Bank is that it is available now, is quick and easy to install, and provides power features that can transform today’s retailers. While card payments may rule the roost now, no merchant can afford to miss out on the next payment king.