Core Definition & Basics

Below are answers to some of the most common questions about Pay by Bank payments, including how the payment method works, its security features, and how it is used in the UK.  

What does Pay by Bank mean?

Pay by Bank is an Open Banking payment method that allows customers to transfer funds directly from their bank account without entering card details. The payment is authorised within the customer’s online or mobile banking environment.  

How does Pay by Bank work?

When a customer selects Pay by Bank at checkout:

1. They are redirected to their online or mobile banking.
2. The bank displays the payment details for approval.
3. The customer confirms the transaction using secure login or biometric authentication.
4. Funds are transferred directly from the customer’s account to the merchant.

 

Is Pay by Bank instant?

In the UK, Pay by Bank typically uses Faster Payments infrastructure, enabling transfers within seconds. Exact timing may vary slightly depending on the customer’s bank.  

Does Pay by Bank require a card?

No. Pay by Bank transfers funds directly from the customer’s bank account and does not require debit or credit card details.  

Do I need a Pay by Bank app?

No. Pay by Bank payments are usually authorised within the customer’s existing online banking or mobile banking app. A separate Pay by Bank application is not required.  

Is Pay by Bank the same as Open Banking?

No. Open Banking is the regulatory and technical framework that enables secure bank data sharing and payment initiation. Pay by Bank is a payment method built on Open Banking technology that allows customers to transfer funds directly from their bank account.  

Security & Regulation

 

Is Pay by Bank safe?

Yes. Pay by Bank transactions are authorised within the customer’s own banking environment using Strong Customer Authentication (SCA). Because no card details are shared with the merchant, exposure to card-not-present fraud is reduced.  

What is Pay by Bank in the UK?

In the UK, Pay by Bank operates under Open Banking regulations and must comply with Strong Customer Authentication requirements under the Payment Services Regulations 2017.  

Is Pay by Bank available outside the UK?

Pay by Bank is widely adopted in the UK under Open Banking regulations. Availability in other countries depends on local Open Banking or PSD2 frameworks and bank participation.  

Comparisons

 

What is the difference between Pay by Bank and Direct Debit?

Pay by Bank is a real-time, customer-authorised payment completed during checkout. Direct Debit is a recurring payment method where merchants collect funds automatically after prior authorisation.  

What is the difference between Pay by Bank and Pay by Card?

Pay by Bank transfers funds directly between bank accounts using Open Banking APIs. Card payments rely on card networks such as Visa or Mastercard and require card details for authorisation.  

Is Pay by Bank the same as BACS?

No. BACS is a bulk payment system commonly used for payroll or recurring transfers and may take up to three working days to clear. Pay by Bank processes payments in real time through online banking authorisation.  

Availability

 

Which banks support Pay by Bank?

In the UK, most major banks support Pay by Bank through Open Banking connections, including Barclays, HSBC, Lloyds, NatWest, Nationwide, Santander, and Monzo. Availability depends on both the customer’s bank and the merchant’s integration provider.