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Top 5 Things You Need to Know About Pay By Bank

Pay By Bank is still considered new within the payment industry, and we’re focused on delivering solutions that are there to benefit you on every level, so let’s clear up any of the questionable areas of this innovative payment method.

What is Pay by Bank?

Pay by Bank is powered by the Open Banking initiative. It allows customers to pay with a bank-to-bank transfer on their desktop, mobile, or using their banking app, without the need to remember sort codes or account numbers. They simply select their bank, verify their identity using online banking details, and choose the account to pay from. Funds are sent and received straight away.

5 things you need to know about Pay by Bank:

1. Yes - the fees are lower than card transactions

Typical card fees are about 2.5% for each transaction, compared to Pay By Bank’s fees of 0.5%.

The more customers that choose to use Pay By Bank, the higher your average transaction value, transaction volume, and therefore the more significant your savings will be.

We built a calculator to help you see what your potential savings could be:

2. It doesn’t replace your current card payment options

Pay By Bank is an additional option for your customers to choose at the checkout stage, you can still take debit and credit card payments. By offering multiple payment options you can improve convenience for customers who recognise this payment method, or want to use it for the first time.

Your current payment processor doesn’t necessarily have to be replaced, but to make sure you’re getting the best value for money, we can run a check with our 70 gateway and merchant service partners to check you’re getting the best card payment transaction rate.

Additionally, our off-the-shelf payment service can expand beyond card and Pay by Bank options, to include Direct Debit, digital wallets (ApplePay, GPay) or Buy-Now-Pay-Later options (such as Klarna and more).

Watch the full demo video here:

3. Many people in the UK are ready to use Pay By Bank

A massive 93% of UK Customers (49 million) already have the online banking details required to use Pay By Bank, with 6 million customers actively transacting with the service right now.

Thanks to the Pay By Bank service being powered by the open banking initiative, adopted by the majority of UK banks, customers are using their existing online banking login details or a mobile banking app. No need to have a payment card handy, or remember sort codes and account numbers.

4. HM Revenue & Customs (HRMC) have been using it since 2021 - collecting over £10.5bn

Their adoption has been phenomenal, and in terms of endorsement and trust, I don’t think you can get much better than that.

It was launched for self-assessment tax returns, and is now available on 24 different types of tax regimes including PAYE, corporation tax and VAT.

Over £1bn of payments were made in their first year, rising to £2.5bn in 2022, and jumping to £10.5bn in 2023.

5. Our own Clients are seeing 10% – 50% adoption

Real-world data from our current Pay By Bank clients clearly shows it isn’t a niche payment offering, with adoption rates varying across different industry sectors and how payment options are presented. By closely monitoring hundreds of thousands of transactions, and the payment methods customers select, we can gather intelligence that will help us fine-tune the service. We also liaise with our Pay By Bank clients to encourage maximum use, as well as develop additional features.

The more customers you can divert to Pay By Bank, the lower your fees. And with many more clients in our development queue, I can see first-hand how eager organisations are to capitalise on the reported 6 million active users of this payment method.

Talk to us

Want to know more about Pay By Bank?

Simply reach out to your Key IVR Account manager, or contact us on +44 1302 513 000 or email

Written by:

Mark Kelly

Chief Commercial Officer (CCO) (UK) & VP International Sales (US)

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